Insurance proceeds as part of gross estate
QUESTION: In July 2001, XAXA took out a life insurance policy of his own life at 4,000,000 pesos. He designated ZAZA, his daughter, as beneficiary with respect to 1/2 of the proceeds. He reserved his right to replace ZAZA anytime with another person.
XAXA also designated YAYA as the irrevocable beneficiary of the other half.
XAXA died in October 2004. Will the proceeds of the life insurance of XAXA form part of his gross estate?
ANSWER: Only the proceeds of 2,000,000 given to ZAZA shall form part of XAXA's gross estate.
According to the Tax Code, proceeds of life insurance shall not form part of the gross estate of the decedent to the extent of the amount receivable by an irrevocable beneficiary. In other words, the amount receivable by a revocable beneficiary under an life insurance policy shall still form part of the gross estate of the decedent-policy owner.
As to YAYA's share in the proceeds, the same cannot be included in XAXA's gross estate.
XAXA also designated YAYA as the irrevocable beneficiary of the other half.
XAXA died in October 2004. Will the proceeds of the life insurance of XAXA form part of his gross estate?
ANSWER: Only the proceeds of 2,000,000 given to ZAZA shall form part of XAXA's gross estate.
According to the Tax Code, proceeds of life insurance shall not form part of the gross estate of the decedent to the extent of the amount receivable by an irrevocable beneficiary. In other words, the amount receivable by a revocable beneficiary under an life insurance policy shall still form part of the gross estate of the decedent-policy owner.
As to YAYA's share in the proceeds, the same cannot be included in XAXA's gross estate.
