The deceased owned the life insurance policy and named a single beneficiary to receive the insurance money (transfer on death).
That single beneficiary used all of the life insurance proceeds to pay bills associated with the deceased (funeral expenses, attorney, and repairs to the deceased's home).
Although the deceased specified that the insurance money was to be used for expenses, the beneficiary had no legal obligation to do so.
Can the insurance beneficiary claim on their personal taxes any tax credits or deductions for the money spent on behalf of the deceased?
What bearing, if any, does the answer to #1 depend on the source of the money to pay the bills of the deceased (i.e., insurance money vs. personal funds)?
Not sure if these items are relevant are not:
- The insurance beneficiary was one of two co-representatives for the estate; both were also among a larger group of heirs.
- The home was sold and proceeds distributed to all heirs.
- No taxes owed on either the insurance policy or the home sale.
- All heirs get along with each other; no concerns at all about any heir causing any trouble for the insurance beneficiary. All will be very happy for any tax break the beneficiary can receive on their personal taxes.