Why does a widow own to pay packet taxes on energy insurance?
Answers: Mskittytwo,
Most Life Insurance benefits paid to a named beneficiary (like the widow) are free of probate expenses and are not taxable to the beneficiary as income. However, the amount of the disappearance benefit may be includable in the estate of the of the person who passed away for estate tariff purposes. I doubt this is a problem for the widow, but just in grip, she might consider a chat with an estate planning professional to make sure.
Good Luck,
Grampy
If the estate is the beneficiary, later the proceeds go into the estate, and may be subject to the estate tax,.
If the widow is name as beneficiary, then there should be no levy. Because she was not the beneficiary of the policy - her husband's estate was. Then the procedes become division of the estate, and death taxes must be paid until that time it can be distributed to her.
Most life insurance settlements are not taxable. Retirement benefits, paid on behalf of a departed individual, are taxable, though. she would pay taxes only if she be not the beneficiary. If the life insurance went into the husbands estate next estate taxes are pretty heavy.
They needed a better financial planner. yikes