Do I need to consider an estate tax plan?
Free Insurance Quote Comparison
Secured with SHA-256 Encryption
UPDATED: Sep 15, 2020
It’s all about you. We want to help you make the right legal decisions.
We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.
The estate tax law has been revised in recent years to raise the portion of estates exempt from the tax ($675,000 in 2001 raised to $1.5 million in 2004) so that the number of estates subject to the tax has dropped (to 2.3% in 2001) and the value of the average estate that was taxed was about $2.7 million in 2001. Some proposed legislation calls for the eventual elimination of the tax over the next decade. Business owners and farmers (who may be cash poor, but rich in property or land) are among the groups that sometimes unexpectedly leave estate tax bills for their heirs. A thorough review of your insurance and financial plans should include a consideration of possible estate taxes with a knowledgeable advisor.
For those with estate tax problems, life insurance is usually the suggested funding vehicle to provide cash to pay for settling taxes and related expenses.