Estate tax is not something most people need to worry about – at least for now. But it’s an important topic to understand none-the-less. That’s because Congress could change the law. If they do that, you might very well find yourself facing a stiff and devastating estate tax problem.
Having said that, if you don’t have a taxable estate right now, it’s important to understand that too. Don’t let insurance agents sell you a solution for a problem you don’t really have.
There are actually two short answers here – no, and sometimes. Confused? It’s actually not that complicated. There are two answers, because there are two potential tax liabilities that could be incurred as a result of receiving life insurance proceeds. Regular Income Tax Liability This is the tax liability that most people are most immediately …
Probably the most underrated – an under-used – benefit of having a life insurance policy is having it to cover estate taxes. These are taxes that are levied on estates transferred from one generation to another, above a certain minimum dollar threshold amount. Depending on how large your estate will be, the taxes may or …