On March 1, Bart transfers ownership of a $700,000 life insurance policy on his life that he purchased in 2015. How long must Bart live to avoid inclusion of the $700,000 death benefit in his estate?

Question

Quizplus · Accepted Answer

According to the "three-year rule" in U.S. tax law, if an individual transfers ownership of a life insurance policy within three years of their death, the death benefit is included in their estate for tax purposes. Therefore, Bart must live for at least three years from the date of the transfer (March 1, 2021) to avoid inclusion of the $700,000 death benefit in his estate.

On March 1, Bart Transfers Ownership of a $700,000 Life