Most people believe that life insurance proceeds are “tax-free.” While in many cases life insurance proceeds are income tax free, they are not estate tax free. If you own life insurance on your life, as many people do in order to provide for their loved ones, the proceeds are included in your estate for purposes of determining estate tax. A life insurance trust can be utilized to own insurance outside your estate, preventing the proceeds from being subject to estate tax, and can be a very useful way to provide for your family at your death.
Life Insurance Trust
