Asset Transfer

What Does Asset Transfer Mean?

An asset transfer occurs when an individual transfers ownership of an asset to another person or group of people.

Life insurance policies can serve as a means to transfer assets to beneficiaries. Naming the right person on the policy matters, since the payout goes directly to whoever is listed, regardless of what a will says. There are some common pitfalls to watch for when setting up life insurance beneficiaries.

Insuranceopedia Explains Asset Transfer

Wealth from life insurance policies is not the only asset commonly transferred after the owner’s death. Many individuals specify the transfer of their assets in a will and testament. However, unlike many assets transferred through wills, death benefits from life insurance policies are generally exempt from certain taxes, making them an appealing option for transferring wealth. In most cases, the death benefit paid to a named beneficiary is not subject to federal income tax, though estate taxes can still apply for very large policies. The specifics of how life insurance is taxed depend on the policy structure and the size of the estate.