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  • Survivorship insurance lessens blow of estate taxes
  • May 21, 2010
  • federal estate taxesBy M.K. Guetersloh, Life Quotes, Inc.

    For couples who want to help their children avoid federal estate taxes, 2010 is a good year to die.

    Fortunately, there is survivor- ship life insurancefor the rest of you who are not so lucky to make a date with the Grim Reaper this year.

    Survivor-ship life insurance, also called second-to-die life insurance, pays off when the second spouse dies. Ideally, it is used to provide children who will inherit Mom and Dad’s business, property or stocks with an immediate source of cash to pay off estate taxes, explains estate planning expert Brian Ashe of the Lisle, Ill.-based Brian Ashe and Associates.

    So far, the current estate tax law expired on Jan. 1, 2010, but insurance experts and financial planners alike are warning clients that the tax undoubtedly will return in 2011.

    “If you have a financial or estate plan that includes survivor-ship life insurance, you shouldn’t tear up that plan,” says Ashe, who also serves as treasurer for the Life and Health Foundation for Education, a non-profit organization dedicated to helping consumers make smart insurance decisions. “The Estate Tax has been around since the Spanish-American War and our government needs the money.”

    Those who are now sitting down with financial planners with estates that are valued between $1 million and $4 million may want to wait and see where federal lawmakers set the exemption value, says Mike Boot, a spokesperson from the Society of Actuaries. However, those with larger estates valued at $10 million or more should continue with their planning.

    “Estates that large will definitely be subject to any kind of estate tax Congress creates,” Boot added.

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  • Category: Featured Articles, Life Insurance, Tips, Videos

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