Life Insurance

Enter the total death benefits payable on all life insurance that is included in the gross estates of the husband and wife. This includes all life insurance in which they have any incident of ownership such as the power to name the beneficiary of the policy or borrow against the policy. In the Joint column, enter the amount of total death benefits payable under any second-to-die life insurance payable upon the death of the survivor of the husband and wife if either of them have any incident of ownership in the policy.

Note: In the case of death, the Current Year (entered in Step 1 of the Inputs Section) determines whether or not the program applies the "three year rule." The "three year rule" implies that if the plan owner dies within three years of the Current Year, life insurance is not removed from the estate. In Plans 5, 6, 12, and 13, the program will automatically transfer all life insurance, including both life insurance owned by the spouse and joint or second-to-die insurance, into an irrevocable life insurance trust that is no longer part of the taxable estates of the husband or the wife. However, if death occurs within three years of the transfer, life insurance is pulled back into the taxable estate.