Estate Planning Insurance Considerations

Are you aware that at death your assets may not be automatically distributed to your loved ones? Instead, several "unwanted heirs" may step forward first for their share of your estate.

The "Unwanted Heirs"

There is a mistaken impression that, at death, your assets will automatically be distributed to your loved ones. Instead, several "unwanted heirs" may step forward FIRST for their share of your estate.

These "unwanted heirs" include:
"Increasingly, business owners are buying life insurance to pay for estate taxes."
Wall Street Journal

What Might This Mean for Your Estate?

The problem is that the "unwanted heirs" can siphon off a significant portion of an estate's total value.

2008 Federal
Estate Tax (1)
Costs at 5% (2)
$ 1,000,000 $ 0 $ 50,000
1,500,000 0 75,000
2,000,000 0 100,000
2,500,000 225,000 125,000
3,000,000 450,000 150,000
4,000,000 900,000 200,000
5,000,000 1,350,000 250,000
7,500,000 2,475,000 375,000
10,000,000 3,600,000 500,000
20,000,000 8,100,000 1,000,000

(1) Based on the 2008 estate tax rates and $780,800 unified credit. The Economic Growth and Tax Relief Reconciliation Act of 2001 repeals the estate tax for one year – 2010. Under that law, the federal estate tax continues, but with increasing unified credits and decreasing top estate tax rates, until 2010 when it is repealed only for that year. Without future Congressional action, the 2001 federal estate tax rules will be reinstated in 2011, but with a $1 million exemption equivalent (as scheduled to increase prior to the Act).

(2) Actual costs may be higher or lower.   NEXT PAGE >>