Can a 1 participant plan (or just the Trust) continue after the death of the sole participant?

[Bird]

19 hours ago, RayJJohnsonJr said:

Briefly: In divorce mediation it was agreed the wife (now ex) would get the policy at sole participants death. So, the decree says he has to make her beneficiary of the policy.

I second Larry's confusion, and the part above is screaming at me.  Being beneficiary of the policy is not the same as being entitled to the policy itself as plan beneficiary, and in any event she can't be the beneficiary of the policy on her own life as noted above.  

[jpod]

Larry Starr:  Nice try to obfuscate the fact that you said that the exemption applies when clearly it does not.  You took the bait and we pulled you in the boat. Hope your clients are not the victim of such mistakes.  

[Larry Starr]

On 8/18/2018 at 5:54 PM, jpod said:

Larry Starr:  Nice try to obfuscate the fact that you said that the exemption applies when clearly it does not.  You took the bait and we pulled you in the boat. Hope your clients are not the victim of such mistakes.  

What are you talking about?  The original issue was how to get the contract out.  We gave the rules for how to do it.  Someone decided to argue a  peripheral issue that has nothing to do with the issue of getting the contract out.  The question never was "is this a prohibited transaction"; the question was how to make it happen.  If it WAS involving a disqualified person, it still wouldn't have been a PT as it would have been ok because there is an exemption for a PT in this case.  If it isn't a PT, then they can still distribute out the contract using the method suggested.  The original poster has an answer to his question, and it isn't a PT (either because the people involved don't rise to that level, or if they do, because it is exempted from the PT rules).  The client got the right answer to the question asked; why do you insist on making it a different question?

[Larry Starr]

On 7/11/2018 at 4:09 PM, jpod said:

Another thought.  Can the ex-spouse afford to buy the policy from the plan?  I am wondering if the PT exemption that allows these purchases can be used in this instance.  If she can do that than she can roll the $120,000 cash to an inherited IRA and there will be no immediate tax consequences to her. 

It was you that posted the original question about distributing the policy.  The bottom line is that the PT doesn't apply, and the methodology provided to making the distribution.  Ray Johnson got what he needed from all the responses combined.