You have two issues:You don't "verbally" leave someone money from a life insurance policy. You are either the named beneficiary on the policy, or you are not.The proceeds of a life insurance policy received due to the death of the insured are not taxable to you. There may be a nominal amount of income from interest paid from date of death to date of settlement, but the face value is exempt from tax.What do you mean by "verbally?"

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A family member left me some money verbally from a life insurance policy. Can I still avoid Txes?

Forum|Forum|6 years ago
June 1, 2019
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Best answer by bwa

You have two issues:

You don't "verbally" leave someone money from a life insurance policy. You are either the named beneficiary on the policy, or you are not.
The proceeds of a life insurance policy received due to the death of the insured are not taxable to you. There may be a nominal amount of income from interest paid from date of death to date of settlement, but the face value is exempt from tax.

What do you mean by "verbally?"

S

SweetieJean

Verbally?

P

ppzimmermanAuthor

My Son purchased an additional Life Insurance policy while in the Army and informed his Wife that He wanted give $50,000 to me. The insurance company told him He could not add me as a beneficiary on the policy.

S

SweetieJean

However, she is under no legal obligation to give you any of the proceeds.

B

bwa

Then his wife is the beneficiary, and what she gives you is a gift from her to you. Because it's over $14,000 she would need to file a gift tax return but most likely wouldn't owe any gift tax.

B

bwaAnswer

You have two issues:

You don't "verbally" leave someone money from a life insurance policy. You are either the named beneficiary on the policy, or you are not.
The proceeds of a life insurance policy received due to the death of the insured are not taxable to you. There may be a nominal amount of income from interest paid from date of death to date of settlement, but the face value is exempt from tax.

What do you mean by "verbally?"