How To Avoid Estate Taxes On Life Insurance

How To Avoid Estate Taxes On Life Insurance

by Bernard Fruchtman, Esq.


Life insurance proceeds are free of income taxes. In addition, the proceeds go directly to beneficiaries, bypassing probate (the often time consuming process of certifying the will).

However, if you own the life insurance policy at your death, or if you have any ownership rights (explained below) in a policy the proceeds will be included in your estate and will be subject to estate tax.

Advantages of a Life Insurance Trust:

If you set up an irrevocable life insurance trust you get the following benefits:
1. Removal ofthe proceeds from your taxable estate
2. Reduction ofprobate costs (probate fees are often based on a percentage of the value of your estate)
3. Insulation of the insurance policy from your creditors More…

Naming an Executor is Important

Naming an Executor is Important

The News Journal
by Nancy F. Blumberg, CPA, CFP
and John H. Sterling, CPA

Simon Master & Sidlow, P.A.

What is an executor of a will?It’s the person who handles the deceased’s affairs during the probate process.Without a will, the court will appoint someone to perform this function.

Therefore, it is important while a person is making out a will to name an executor and get his or her agreement to perform this function.It is also important for the person to discuss the responsibilities of the executor so the person knows what is expected.

Many people don’t realize the work that is involved.The executor’s job usually involves lots of time and effort and frequently exposes him or her to personal liability.

The executor locates the will, offers it for probate in the proper court, collects the assets so they can be distributed according to the terms of the will, safeguards the assets and makes sure they are appraised, files the necessary federal and state tax returns, pays any related taxes, cancels credit cards and various accounts, pays the debts of the estate and distributes the assets of the state. More…