Incidents Of Ownership

What Does Incidents Of Ownership Mean?

“Incidents of ownership” is a legal term indicating control over a property. When an individual transfers their property but retains incidents of ownership, they keep certain rights, such as the right to collect rent from it. This distinction is often useful for reducing the tax burden in estate transfers.

Insuranceopedia Explains Incidents Of Ownership

“Incidents of ownership” refers to any control over property. By invoking incidents of ownership, individuals can transfer property while retaining specific rights, such as the right to receive rent. This type of transfer does not legally qualify as a gift, allowing the transaction to occur without incurring gift taxes.

In the context of insurance policies, incidents of ownership refer to the insured’s rights to:

• Change the policy’s beneficiary
• Revoke an assignment
• Pledge the policy as loan collateral
• Surrender or cancel the policy
• Assign the policy to someone else
• Obtain a loan from the insurer against the policy’s surrender value