| We pay taxes, based on income each and every | | | | rather mundane estate planning practices. This process |
| working years of our lives, but according to Uncle Sam | | | | doesn't have to be a complicated one. The simplest |
| that's not enough, so we pay taxes on death too. As | | | | step to reducing your taxable estate is gifting. You can |
| far as taxes go, the estate tax has always been one | | | | eliminate large amounts of your estate by simply |
| of the least accepted forms of taxation. It is a serious | | | | gifting. Current law allows for a rather large amount of |
| revenue generator for the coffers of the US | | | | money to be gifted, per individual. So, by gifting to |
| government. There has been much talk in recent | | | | family or predetermined beneficiary such as a charity |
| years about the repeal of the estate tax, in order to | | | | you can start reducing your estate. And the beauty of |
| do so we will have to find revenue for another tax | | | | gifting is that there is no limit on how many individuals |
| source to replace the estate tax. This is easier said | | | | you can give to. Why wait till you die to tax your |
| than done, so we wait. And we may be waiting for a | | | | estate when you can gift it to the same beneficiaries |
| long time, as there doesn't seem to be a clear solution. | | | | free from the estate tax. |
| The estate tax is often referred to as the double tax, | | | | The other popular method to reduce estate taxes is |
| as it is a second tax. Essentially the estate tax is a | | | | life insurance planning. Life insurance policies are utilized |
| form of double taxation, since it's taxing money that | | | | by the rich to find any estate tax bill that may be |
| really has already been taxed. Though it may not | | | | incurred by future generations. Life insurance can |
| seem fair, it's currently the way it is. The good news is | | | | provide a large amount of leverage with a rather small |
| that there are ways to avoid this estate tax, | | | | initial outlay. A large estate, with potentially large estate |
| regardless of your tax rate. For the rich, the estate tax | | | | tax consequences can be covered with a rather small |
| is not referred to as the double tax, but rather the | | | | life insurance premium. And because life insurance |
| volunteer tax. For these individuals who might be | | | | proceeds are not taxable, the life insurance payout is |
| classified in the highest tax rate, are often well aware, | | | | completely free of tax, when set up properly. This is |
| when it comes to avoiding the estate tax. | | | | why life insurance has been an integral part of estate |
| All too often, it's the middle class who aren't | | | | planning for years. In fact, life insurance planning is |
| well-versed in estate planning, and that end up footing | | | | worth taking a closer look at for your estate planning |
| the estate tax bill. This is common for even those that | | | | needs. This is not just exclusive to avoiding the estate |
| may be in a lower tax rate. All they need is a little bit | | | | tax. The synergistic effect, along with the tax |
| of knowledge, and they too can eliminate the estate | | | | advantage of life insurance, makes it an excellent tool |
| tax. To touch on a few of the techniques that the ultra | | | | for the transfer of wealth. |
| rich utilize to avoid the estate tax, they often use | | | | |