What is Incidents Of Ownership?
Any interests or rights that an individual maintains in an asset, including property and insurance, that allow the person to change, modify, use or benefit from that asset. This is important for determining estate taxes. An individual can reduce the size of his or her estate by gifting assets to beneficiaries but, to avoid estate tax on the gift, the original owner must not retain any incidents of ownership in the gifted assets. Read more for examples and further explanation including related video clips and also comments
Example explains Incidents Of Ownership
In insurance, incidents of ownership exist on a policy if an individual has the right to change the beneficiary, transfer ownership of the policy, use the policy value as collateral for a loan, or any other traditional rights of ownership. In terms of property, if an individual has the right to possess or use that asset, or if he or she benefits in any other way from the property, this would be considered an incident of ownership.
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