Does Wife Need to Waive her Right to Community Property?

[scagnt83]

All that sounds great in theory. But the real life benefits are neglegable imo based on time spent. There are no real turn key solutions for that in the 401k world that I know of. There are some in the Pension world obviously. But it still is not a common thing even in that sector. If I remember correctly, regulations used to be a lot more generous for life insurance inside a Qualified Plan pre 2000s.... or maybe it was pre 1990s... others on here probably remember.

 

[djs]

Give us an example of one you found, where the DEATH BENEFIT was taxable as gift versus estate or inheritance.

This is actually easily done. Any time the death benefit is to a charity you run into this in somewhat of a reverse scenario, the death benefit paid to the charity can be used as a tax deduction since it was effectively a gift.

There are a LOT of oh by the ways to that statement though... don't take it as tax advice.

Dan

 

[regularAgent]

Just in case of beneficiaries changes.....

In community property states (AZ, CA, ID, LA, NM, NV, TX, WA, WI), unless named as the beneficiary, the spouse must also sign a Beneficiary Change Request form. An exception may be made if the owner provides evidence that the policy is separate property. The naming of a beneficiary other than the spouse in a community property state will not defeat the spouse one-half community interest.

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But this is what happens with qualified money....

....... if the IRA contributor resides in a community property state and the spouse did not approve the designation of beneficiary, he or she may be entitled to a portion of the IRA. Under the laws of these states, the spouse must be the primary designated beneficiary, unless he or she consents to another party being the primary designated beneficiary. The community and marital property states are Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.

Read more: Can a spouse who is not named as a beneficiary receive assets from an IRA? Can a spouse who is not named as a beneficiary receive assets from an IRA?

 

[VolAgent]

This is actually easily done. Any time the death benefit is to a charity you run into this in somewhat of a reverse scenario, the death benefit paid to the charity can be used as a tax deduction since it was effectively a gift.

There are a LOT of oh by the ways to that statement though... don't take it as tax advice.

Dan

I will concede your point, on the caveat that I've never seen it done that way so I will accept it. Every presentation I have ever seen on charitable giving with life insurance has had the payor taking a deduction with premiums paid. So there was no tax deduction when the benefit was paid out.

The general pitch/premise of this idea is, "Leverage your giving to your charity. Instead of giving them pennies now, give them dollars later, while still getting a tax deduction."