If I have term life insurance for 5 million dollars, owned by my wife, with my wife the primary beneficiary and our kids the contingent beneficiaries, and we both die simultaneously, will there be estate tax? (assume our wills have eachother as primary beneficaries and kids as secondary for everything) Thanks
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Estate tax is due on her estate (even if there were nothing else. She's the owner and that amount goes to her estate.
-- Paul A. Thomas, CPA Athens, Georgia
Definently no tax if you die in 2010.
Aside: I'm wondering how many people are planning on dying that year just to beat the transfer taxes?
But I think they better hurry if they're planning on it 'cause I expect the loophole to be closed by then... :)
I believe that the insurance proceeds would not enter the wife's estate if the wills specified that, in the case of "simultaneous" deaths, it is assumed that the wife died first. (I believe that to be the law in some states.) That is is not an uncommon will clause; and is included precisely for situations such as this. The insurance proceeds, as well as the husband's other assets, would then go directly to the contingent beneficiaries. Bill
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