Viatication

During Marnie’s last consult with the Grim Reaper, she was surprised to see that he’d brought along a squat little man in a tweed suit. “This is my insurance and tax guy, Sam,” the Grim Reaper said. As it turns out, now that Marnie’s been diagnosed with a terminal illness and death is pretty much imminent (hence the meet-ups with ol’ Reapmeister), there are rules about what she can and can’t do with her possessions before she dies. And when it comes to her life insurance policy, Sam tells her, she can’t gift it to her beneficiaries in an effort to prevent them from having to pay estate taxes.

But there is something she can do with that life insurance policy, and it’s called viatication. “Viatication” is the process of buying life insurance policies from terminally ill folks, and it’s done by firms that are state-licensed to do these sorts of things. The sick person receives most of their policy money now, and in return, the firm continues to pay the policy premiums, and collects the whole amount once the person dies.

This might be great for Marnie, Sam says, because of two considerations. First, viatication means she has money now to do stuff like pay medical bills or foot the bill for her granddaughter’s college tuition. And second, viatification doesn’t violate the three-year rule on dying people transferring assets to people to avoid estate taxes, so it’s got that going for it, which is nice.