A wife's husband died. He owned a life insurance policy to insure his life. The policy was only in his name. It has been held in a "grantor trust" under IRC Section 677(a) that was created one year ago. While alive, he had the right to amend or revoke the trust and receive all of the trust property. His wife was the only beneficiary of the insurance policy according to the trust at the time of his death. She is also the personal representative of his estate in accordance with his will. Are the life insurance policy's proceeds included in his gross estate on Form 706 in this situation?
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The life insurance was on the decedent's life, and he owned all or certainly most of the "incidents of ownership." Thus, the proceeds received or to be received from the policy, by his widow, are part of his estate. Report on F-706, Schedule D.
The insurance company should issue a Form 712, reporting the policy's proceeds or value.Roland Slugg
"I do what I can."
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