Permalink Submitted by tomd37 on Tue, 2014-09-02 17:41
What type of problems could there be Bruce? The guidance I received when establishing a joint RLT some seventeen years ago, and recently restated to me, was that the primary beneficiary of my life insurance policy should be our joint RLT. Why would my spouse not be the logical primary beneficiary? I should note that with the changes in the exclusion amount in the interim period we are no longer concerned about the federal estate tax. I believe it was somewhere near $625K back in 1997 and now is ~$5.350M. Tom D.
Permalink Submitted by mk foss on Tue, 2014-09-02 18:41
I don’t see problems with naming the RLT as beneficiary of a life insurance policy – it may make trust funding easier in fact.The RLT is not a good choice as beneficiary of an annuity. The death payout options for an irrevocable trust are not beneficial income tax-wise. The living trust becomes irrevocable upon death which changes everything for annuities.
Permalink Submitted by Bruce Steiner on Wed, 2014-09-03 03:08
In Morey v. Everbank, 93 So. 3d 482 (Fla. 1st DCA 2012), http://scholar.google.com/scholar_case?case=894160280861609138&hl=en&as_sdt=6&as_vis=1&oi=scholarr , leaving a life insurance policy to a revocable trust destroyed the creditor protection.Annuities are often awkward, and leaving an annuity to a revocable trust can create some income tax problems.
Permalink Submitted by Bruce Steiner on Tue, 2014-09-02 17:28
There could be.
Permalink Submitted by tomd37 on Tue, 2014-09-02 17:41
What type of problems could there be Bruce? The guidance I received when establishing a joint RLT some seventeen years ago, and recently restated to me, was that the primary beneficiary of my life insurance policy should be our joint RLT. Why would my spouse not be the logical primary beneficiary? I should note that with the changes in the exclusion amount in the interim period we are no longer concerned about the federal estate tax. I believe it was somewhere near $625K back in 1997 and now is ~$5.350M. Tom D.
Permalink Submitted by mk foss on Tue, 2014-09-02 18:41
I don’t see problems with naming the RLT as beneficiary of a life insurance policy – it may make trust funding easier in fact.The RLT is not a good choice as beneficiary of an annuity. The death payout options for an irrevocable trust are not beneficial income tax-wise. The living trust becomes irrevocable upon death which changes everything for annuities.
Permalink Submitted by Bruce Steiner on Wed, 2014-09-03 03:08
In Morey v. Everbank, 93 So. 3d 482 (Fla. 1st DCA 2012), http://scholar.google.com/scholar_case?case=894160280861609138&hl=en&as_sdt=6&as_vis=1&oi=scholarr , leaving a life insurance policy to a revocable trust destroyed the creditor protection.Annuities are often awkward, and leaving an annuity to a revocable trust can create some income tax problems.