Tax Facts

220 / Is the annual exclusion available when an insured transfers ownership of a life insurance policy to two or more donees jointly?

No. If joint action is required to exercise ownership rights in the policy, it is a gift of a future interest.1

Planning Point: If gifts of premiums are subsequently made by the donor they should be made separately to each donee and the donees may then pay the premiums to the insurance company. That way the gifts of premiums will qualify for the annual gift tax exclusion.

1. Skouras v. Commissioner, 188 F.2d 831 (2d Cir. 1951).

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