Life Insurance for Estate Planning
How does life insurance help with estate taxes?
Life insurance can be used to pay estate taxes. The federal estate tax exemption is $13.61 million per person in 2024. Estates above this amount are subject to a 40% estate tax. Life insurance provides liquidity to pay estate taxes without forcing the sale of illiquid assets.
Key Points
- Federal estate tax exemption: $13.61 million per person in 2024
- Estates above exemption: subject to 40% estate tax
- Life insurance provides liquidity to pay estate taxes
- ILIT: keeps death benefit out of the taxable estate
- An independent agent can help you design a life insurance estate tax plan