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Ask Dave

Will The IRS Get It Before I Do?

Crystal's dad passed away and left the IRS with debt and his wife with life insurance money. What happens here?

QUESTION: Crystal’s mom has a life insurance policy on her dad, and he owes $300,000 to the IRS. She is the beneficiary of the policy. If something happens to him, can they take the life insurance money?

ANSWER: No, unless she signed a joint return at the time the tax was levied. If it’s just his tax, the IRS will come in and file a claim against his estate, but that’s only the property he owned. The life insurance proceeds don’t go into the estate.

Tax Pro or File Your Own?

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Tax Pro or File Your Own?

Use this free quiz to help you decide which tax filing method is right for you.
 
Take the Quiz

Tax Pro or File Your Own?

Use this free quiz to help you decide which tax filing method is right for you.
 
Take the Quiz