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§ 13724.2. Insurance Paid from Separate Funds, Date of Death Prior to January 1, 1981.

18 CA ADC § 13724.2Barclays Official California Code of Regulations

Barclays California Code of Regulations
Title 18. Public Revenues
Division 2.5. State Controller (Refs & Annos)
Chapter 1. Inheritance Tax (Refs & Annos)
Article 4.5. Insurance
18 CCR § 13724.2
§ 13724.2. Insurance Paid from Separate Funds, Date of Death Prior to January 1, 1981.
Currentness
If all the premiums on a policy of insurance issued upon the life of a husband or wife and payable to the surviving spouse have been paid from the insured's separate funds, and the insured had retained the legal incidents of ownership in the policy until death, $50,000 of the proceeds of the policy are excluded by reason of the insurance exclusion (see Section 13723) and the proceeds, being separate property of the decedent, are also included in computing the surviving spouse's marital exemption under Revenue and Taxation Code Section 13805 as it applies to decedents dying prior to January 1, 1976, and to the marital exclusion under the amendment to Revenue and Taxation Code Section 13805, effective as to decedents dying on or after January 1, 1976 (see Section 13805). However, in calculating the one-half of the clear market value of the decedent's separate property (factor (1)) for the purpose of determining the maximum marital exemption or exclusion to which the spouse is entitled, the amount of the insurance proceeds must be reduced by the $50,000 insurance exclusion.
This regulation may be illustrated by the following example:
EXAMPLE. A at his death in 1976 left a $200,000 insurance policy on his life payable to his wife, B, the premiums on which were paid from A's separate funds, and as to which the legal incidents of ownership were retained by A until his death. In addition A left other separate property having a value of $100,000 all of which he left to B. B would be entitled to the $50,000 insurance exclusion and a marital exemption or exclusion in the sum of $125,000. The marital exemption or exclusion is computed as follows:
(1) One-half the net value of decedent's separate property:
$200,000
Insurance proceeds
50,000
Less insurance exclusion
$150,000
100,000
Other separate property
$250,000
$250,000
= $125,000
2
(2) Amount of property received by wife which is not exempt:
$200,000
Insurance proceeds
100,000
Other separate property
$300,000
Total received by wife
50,000
Less insurance exclusion
$250,000
Factor (1) is lower, so $125,000 is the marital exemption or exclusion.

Credits

Note: Authority cited: Section 14740, Revenue and Taxation Code. Reference: Section 13724, Revenue and Taxation Code.
History
1. Amendment of section title 7-2-81; effective thirtieth day thereafter (Register 81, No. 27).
This database is current through 5/10/24 Register 2024, No. 19.
Cal. Admin. Code tit. 18, § 13724.2, 18 CA ADC § 13724.2
End of Document