The best idea in estate planning is never delayed to pay tax
This year, a huge sigh of relief could be heard among the moderately wealthy when President Barack Obama signed latest tax bill into law earlier. If no new law, the first million of assets can only qualify for exemption from federal estate tax, which applies the same amount in 2002.
For example, the married couples can leave an unlimited amount to his spouse without tax. But the new law delays reversion released for at least two years. In the meantime, everyone enjoy the exemption of $ 5 million dollars. Therefore, every person could only pass a simple rich or at least delay the process of real-planning for two years.
Life insurance has been purchased by many people to sources of liquidity that will be used to pay taxes. They have to hang on the policy. Congress can increase the amount released in two years, remains the same, or reduce it because in this economy given the federal deficit and national debt. But I hope they’ll reduce it because of existing insurance will be required.
In addition, that has not or do not have real-tax exposure, may be taxed in the future. If these people are facing a real tax on the road, they should at least buy term insurance now, so guaranteed to lock the ability to enter long-term coverage is better in the form of cash value coverage.