easy · Certified Financial Planner Estate Planning
The Ostrow household gifted a life insurance policy on Mr. Ostrow's life to an Irrevocable Life Insurance Trust (ILIT) 14 months ago. Mr. Ostrow dies in 2026.
What is the estate tax consequence regarding this policy?
- The policy death benefit is excluded because the gift was completed more than one year ago.
- The entire death benefit is pulled back into the gross estate under the three-year rule.
- The policy is included only if the value of the gift exceeded the $19,000 annual exclusion.
- Only the gift tax paid on the policy transfer is pulled back into the estate.
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