Life insurance beneficiary refuses the proceeds

Question

assume my father had a life insurance policy for 1,000,000 on his life with me as the beneficiary. upon his death i recieved the proceeds and did not touch one penny. six months later i decide that my mother needs the money, what can i do? can i opt to denounce the life insurance proceeds and make my mother the beneficiary of the proceeds??

Answer 1

Once you receive the benefits, the term beneficiary loses its meaning. You can gift the money to your mom, but she may be liable for taxes. Check with your tax accountant.

Sounds like your dad is mad at your mom.  

Answer 2

No, you are the named beneficiary, so you can't change it to be your mom.  You can give her the money though, or part of it.

Answer 3

You can do whatever you want with the money because it is yours.  See a tax person to see how to avoid any taxes.   Most insurance companies now have some kind of savings account you can roll the money into which earn interest.  You might do that just on a temporary basis until you decide where to invest the money.  

Answer 4

As the beneficiary, you received the proceeds tax free.  I don't think you can later renounce the proceeds.  You probably have to do that immediately.  Giving the proceeds to your mom will create gift tax liability if it's over a certain amount.

It would be best to go see an attorney who specializes in estates and trusts.  You may be able to put the proceeds into a trust for the benefit of your mother without incurring tax liabilities.

Answer 5

If you got the money, you can give it to your mom. You're just both going to pay income taxes on it.

Answer 6

You can only accept or reject the benefit.  You can't direct it to be transferred to another person.

Answer 7

If you have already taken receipt you can give it to your mother...you would pay gift tax giving it to her (assuming you didn't use your unified credit).

There is no income tax.