I am getting conflicting answers about needing a life insurance trust or not for my term policy. I have a 6M, 30 year laddered term, basically dropping off 2M every 10 years. I'm in my second policy year, so in about 8 years it drops to 4M. My estate planner is telling me that with a trust if I die all 6M will go to my wife, but without a trust, anything above 5.45M excemption (life insurance, taxable accounts etc.) will get hit with estate tax. When I research it though it appears that there may be an unlimited spousal exemption, but I can't nail that down. In addition, the trust has to be in place for a couple years before it's valid or else the courts don't allow it.
I'm only worried about my wife having to pay taxes on anything, if we both die and the kids have to pay taxes, poor them.
Does anyone have more info on this? I'm leaning towards not doing it since it won't kick in for a couple years and by then I'll only have 5 years left before my policy drops to 4M.
I'm only worried about my wife having to pay taxes on anything, if we both die and the kids have to pay taxes, poor them.
Does anyone have more info on this? I'm leaning towards not doing it since it won't kick in for a couple years and by then I'll only have 5 years left before my policy drops to 4M.
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