AboutWillard R. Brumbaugh, LUTCF, CSFP Expertise I can handle questions concerning life insurance, it`s tax implications, how to determine what is appropriate, and how it fits in one`s estate and retirement planning.
Experience For 2 1/2 years I was an expert on AskMe.com, where for most of that time I was ranked #1. I have been a moderator (instructor) for the Life Underwriters Training Council. I have been licensed since 1969.
Organizations I belong to: National Association of Insurance and Financial Advisors - California
and the Inland Empire Estate Planning Council.
I hold the professional designation of Life Underwriters Training Council Fellow.
Question My husband past last month and he told me to take the life insurance payment and pay off the farm. What will this do to my income tax next year?
Answer Dear Sheilah,
I am sorry for your loss.
The death benefit on your husband's policy is not subject to taxation, unless it was part of a pension plan. It could result in an increase in taxation, if you pay off the farm and lose your mortgage interest deduction.
Unless the benefit of the policy is substantially greater than your outstanding mortgage, I would not use it to totally pay off the loan. It is imperative that you keep a reserve against a possible future "rainy day".
Willard R. Brumbaugh, LUTCF
CA License 0374776
www.willardbrumbaugh.com
(760) 247-9090
