Does Wife Need to Waive her Right to Community Property?

Discussion in 'Life Insurance Forum' started by sam816, Jul 25, 2017.

  1. sam816
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    sam816 Well-Known Member

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    The husband is the owner of a life policy on his own life, his wife and 2 kids are named beneficiaries. Arizona is a community property state.

    When he passes, he wants $250k for the wife, and the rest $250k go to his kids.

    If the wife does not have a waiver of community right to the $250k going to the kids, does she have to pay gift tax on this amount?

    TIA.
     
  2. Golfnut2112
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    Golfnut2112 Well-Known Member

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    I would refer him to a tax accountant
     
  3. adjusterjack
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    adjusterjack Well-Known Member

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    Offhand I don't recall if the wife has to consent to that beneficiary designation in Arizona but the easy way to find out is to look at the application and see if her consent is necessary.

    Regardless of that point, death benefits from life insurance are not taxable.

    And even if they were, it would not be a "gift."

    And even if it were a "gift" the lifetime gift tax exclusion is over $5,000,000.

    And even if the lifetime gift tax exclusion wasn't over $5,000,000 the recipient of a gift doesn't pay the gift tax.

    Maybe you should take a class about all this.

    :yes:
     
  4. LGilmore
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    LGilmore Well-Known Member

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    The set up beneficiary wise is fine, no tax consequence as the kids are stated benies. The surviving spouse is not "giving" anything in this case.
     
  5. LostDollar
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    LostDollar Well-Known Member

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    Based on internet reading, that is a blanket statement, which is not necessarily true.
     
  6. VolAgent
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    VolAgent Well-Known Member

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    Please tell us how a beneficiary receiving a life insurance death benefit is a gift from the other beneficiary? Or how it is ever a gift.
     
  7. scagnt83
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    scagnt83 Well-Known Member

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    This is state specific. Read the app. If nothing is on there about it, then ask the carrier. But since apps are state specific, if you need it, it is probably on there.

    Also, if it is needed and you dont get it initially, the carrier will come back and ask you for it and give you the appropriate forms to get signed.
     
  8. LGilmore
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    LGilmore Well-Known Member

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    I work in a community property state and the insurance carriers do not ask for spousal permission to have other beneficiaries besides the spouse.

    There may be some confusion here about permission from spouse. Qualified plans in community property states, very much so. Life insurance, no spousal consent required. I have named other beneficiaries other than spouse many times without question from any carrier. Remember there are many applications where life insurance applies that does not include the spouse to begin with.
     
  9. VolAgent
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    VolAgent Well-Known Member

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    I write in most states. Some companies do require the spouses signature in community property states in some situations. Just looked at one, spouse's signature is required if someone else is the primary beneficiary for more than 50%.

    This is one of those areas where the law may say one thing, but the companies often interpret it in different ways.
     
  10. LostDollar
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    LostDollar Well-Known Member

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    This appeared to be a highly specialized and detail oriented situation, but i did find it referred to on both attorney sites and some general insurance sites. I figured agents selling life insurance would be able to comment on it further. I don't know at what policy $ level an estate attorney or tax accountant should be involved to prevent actual tax consequences if the gift issue comes into play.
     

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