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7 Major Errors in Estate Planning* - Part 4 of 7

by: 
Law Firm of Jeffrey Burr

Continuing the discussion of the 7 Major Errors in Estate Planning, a recent article written for Forbes, leads me to the fourth error – failure to consider the estate and gift tax consequences of life insurance.

An asset class commonly found to be a part of a person’s portfolio, life insurance should draw the attention of the knowledgeable estate planning attorney.  When owned by the insured at his or her death, life insurance proceeds are included in the decedent’s estate which may lead to estate tax liability.  Although, for many of us, the issue of estate tax liability is often a distant concern with the current Federal estate tax exemption being just greater than $5 million for the year of 2012, the tax year of 2013 and beyond may require the estate planning attorney to resolve the issues surrounding life insurance due to the scheduled $1 million Federal estate tax exemption.  The resolution for many clients will require the insured to transfer all incidence of ownership during his or her lifetime.  This is most often accomplished with a trust which is often referred to as an irrevocable life insurance trust (ILIT)).  There are significant complexities surrounding the use of ILITs, especially if there are ongoing insurance premiums to be paid in future years.  The estate planning attorneys of Jeffrey Burr are experienced in providing resolutions to the potential adverse estate and gift tax consequences of life insurance.

A. Collins Hunsaker, Esq.

Las Vegas Office
10000 W. Charleston Blvd., Suite 100
Las Vegas, NV 89135
Phone: 702.254.4455
Fax: 702.254.3330
Henderson Office
2600 Paseo Verde Parkway, Suite 200
Henderson, NV 89074
Phone: 702.433.4455
Fax: 702.451.1853
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