QUESTION
My husband made me a beneficiary of his life insurance but then changed his mind. Other distribution was discussed.
Asked on Sep 13th, 2011 on Trusts and Estates - Michigan
More details to this question:
I am no longer a beneficiary of my husband''s life insurance but was told I would be given a monthly sum? How is this amount determined and distributed by his trust? Financial planner did not discuss what that would mean for me prior to signing away my beneficiary rights. His two children are now the sole beneficiaries. Will I have to pay taxes on the monthly income versus getting a life insurance sum? Financial Planner wants to keep the principle in tact and pay distribution on the interest. What if the children want the payout there would be no interest? Any other advise you can give me? We both use the same financial planner but I felt there was a conflict of interest in this matter.
1 ANSWER
Estate Planning Attorney serving Bloomfield Hills, MI
at
Strobl & Sharp, P.C.
Update Your Profile
The situation, as you describe, does not entitle you to any of the insurance proceeds upon your husband's death. The proceeds will be distributed, income-tax free, to his children.
The trust situation you describe needs to be more fully addressed before a complete answer can be given. However, it seems that you will receive a monthly income based on your husband's trust assets upon his death. The trust will pay income tax on the income of the assets and you will be responsible for taxes on any income in your name (not the trust's).
Answered on Sep 13th, 2011 at 3:24 PM