Spouse Owning Policy

[LGilmore]

Help me out here as maybe I am missing something. Had an applicant assign his spouse as owner of his policy in underwriting. Asked why? "his financial planner told him to" (yea the crap that comes out of the woodwork after the fact) million policy

Let's see
Community property state
premiums paid from a joint account
Spouse US citizen
No real significance towards estate taxes.
If estate tax is an issue, why not insurance trust to pay premiums and a trust as part of the will?
I don't see a reason (tax wise) to make the spouse the owner if they used combined funds to pay premiums, she's a US citizen (marital deduction) and already is the stated beneficiary.


Am I missing something?


This one has me scratching my head a bit.

 

[tlmarketing]

I've had those before when a divorce was involved and insured had to get insurance as part of divorce decree.

 

[scagnt83]

I see no reason to do it.

I would ask for the reason the financial planner gave. If they didnt give the client a reason I think your capable of handling the conversation from there... (find out the reason)


I see it as only causing potential complications. Now she is the only one that can make changes, access CV, etc.

Ownership is all about control while the insured is living. So I dont see the reasoning here.

If anything make her a co-owner... perhaps this is what the planner suggested and it was lost in translation...

 

[Tahoe Ray]

Help me out here as maybe I am missing something. Had an applicant assign his spouse as owner of his policy in underwriting. Asked why? "his financial planner told him to" (yea the crap that comes out of the woodwork after the fact) million policy

Let's see
Community property state
premiums paid from a joint account
Spouse US citizen
No real significance towards estate taxes.
If estate tax is an issue, why not insurance trust to pay premiums and a trust as part of the will?
I don't see a reason (tax wise) to make the spouse the owner if they used combined funds to pay premiums, she's a US citizen (marital deduction) and already is the stated beneficiary.

Am I missing something?

This one has me scratching my head a bit.

Nothing off of the top of my head but certainly a reason to call the planner. Maybe there is a reason we're not thinking of or maybe they don't know what they're doing.

Either way, they might not be life licensed (or they are and just don't use their license) if they're not trying to poach your client. It could be a good referral source...

 

[LGilmore]

"(find out the reason)"

Working on that right now.. the planner told him this for "tax reasons"? But which tax?

Income tax? no difference.
Estate tax? if nothing other done (trust) no difference.

Yes, trying to find out if any other steps were mentioned outside of insurance by this financial advisor. Because if it's just that, it doesn't wash..

I was just wondering if I missed some great change out there. Can't think of any reason to do this as it as been set up. Not going to fight him on it, but will point out other steps that need to be done to make it work that way..