Incidents Of Ownership


DEFINITION of '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.

BREAKING DOWN '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.

  1. Estate Planning

    The collection of preparation tasks that serve to manage an individual's ...
  2. Estate Tax

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  3. Irrevocable Trust

    A trust that can't be modified or terminated without the permission ...
  4. Internal Revenue Service - IRS

    A United States government agency that is responsible for the ...
  5. Beneficiary

    Anybody who gains an advantage and/or profits from something. ...
  6. Estate

    All of the valuable things an individual owns, such as real estate, ...
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