Administration's budget proposals would have a dramatic impact on the life insurance industry

Article Abstract:

The Clinton Administration's 1999 proposed budget contains four provisions which impact the life insurance industry and provide the Administration with 32% of its new $23 billion revenue account. Most important are proposals to change qualified annual exclusion gifts to present interest outright gifts and to deny gifts subject to Crummey powers the annual exclusion. Other areas which would be affected include corporate owned life insurance, reserve rules, and gain calculation on policy surrender.

Laws, regulations and rules, Insurance industry, Life insurance industry

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The advantages of transferring low-yielding assets into an annuity and life insurance

Article Abstract:

Low-yield municipal bonds should be transferred into annuities and life insurance policies for estate tax purposes. Keeping bonds in an estate can mean their value could be subject to a 55% tax, but liquidating them and converting the funds into an annuity or a single-premium life insurance policy can make the funds eligible for an exclusion ratio of 75.6% Some insurance companies offer this option as a "105%" or "110% plan," and some individuals could benefit from using this option.

Insurance Mgmt-Life, Municipal Bonds, Methods, Planning, Estate planning, Estate tax, Estate taxes, Annuities

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Beneficiary liable for unpaid estate taxes

Article Abstract:

Estate planners may want to advise clients not to include life insurance proceeds in their estates in view of a 1992 Tax Court ruling in Baptiste. In this case, the court ruled that the beneficiary of a life insurance policy included in the decedent's estate was liable for unpaid federal estate taxes which an earlier Tax Court case had decided the estate still owed. The beneficiary was held liable as a transferee from the estate.

Cases, Beneficiaries, Transfer taxes

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