How to Transfer Ownership of a Life Insurance Policy
If you have a large life insurance policy that is considered part of your estate, your beneficiaries could be subject to the federal estate tax--a whopping 45% of your assets--after your death. To avoid putting your estate over the threshold for the estate tax, you can transfer ownership of your life insurance policy to someone else. Even if you transfer your policy to your beneficiary, it won't qualify when they're estimating the value of your estate.
Other People Are Reading
Instructions
-
-
1
Choose the person you want to be the new owner of your life insurance policy. It should be a mentally competent adult you trust. It's best to choose someone you expect to outlive, and the process is much simpler if you transfer ownership to the person whom you want to use the funds.
-
2
Call your insurance company and set up a meeting with an agent to discuss transferring ownership of your life insurance policy.
-
-
3
Go to the meeting with a copy of your policy, your identification, the person you're transferring the policy to and their identification.
-
4
Explain that you want to give complete legal ownership of the policy to the beneficiary. They will give you a form to fill out and sign. The transfer is complete once you've signed this form.
-
1
Tips & Warnings
Be sure to transfer the ownership of your life insurance policy soon if you decide that's the best course. If it is transferred within three years of your death, then it can still be included in your estate for tax purposes.
References
- Photo Credit form -3 image by Rog999 from Fotolia.com
