Death Taxes – Will You or Your Loved Ones be Affected?

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Posted on 14th September 2011 by Rita in FREE Consumer Guides |How To's of Life Insurance |Life Insurance

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Death Taxes – aka: Estate Tax, Federal Estate Tax, and Inheritance Tax

In the United States a taxable estate is generally the value of everything owned or have certain interest in at the time of death, minus deductions, such as funeral expense.

Benjamin Franklin once wrote: “In this world nothing can be said to be certain, except death and taxes.”

As the saying goes… you are Taxed when you are coming and Taxed when you are going.

Estate tax rates vary between 37% to 55%, depending on each individual.

Beneficiaries of life insurance proceeds may be required to pay estate tax attributable to the death proceeds, in either of the two following circumstances:

  • The decedent/insured has directed in his/her will that the life insurance beneficiary pay the share of death taxes attributable to the proceeds.

  • The state of the decedent’s domicile has a statue that apportions the burden of death taxes among probate and non-probate beneficiaries in absence of any direction from the decedent regarding where the burden of death taxes should fall.

Resources on this subject:

mystatewill.com gives a great answer to the question: Is life insurance subject to the Federal estate tax?

http://www.mystatewill.com/info_files/life_ins_fed_estate_tax.htm

Tax Laws change often, which means It’s always best to view the IRS.gov site under Estate and Gift Taxes for the current laws.

FAQ’s Estate Taxes

http://www.irs.gov/businesses/small/article/0,,id=108143,00.html

Bulletin No. 2003-17 April 28, 2003

page 8 (search 2042)

http://www.irs.gov/pub/irs-irbs/irb03-17.pdf

Bulletin No. 1996-7 February 12, 1996

Estate Tax, page 16

page 24 (search 2042)

http://www.irs.gov/pub/irs-irbs/irb96-07.pdf


Note: This blog is designed for general information purposes only. All information presented on this site should not be interpreted as legal advice and the author assumes no responsibility or liability for the actions taken or not taken by the readers based upon such information. For legal and tax advice contact your attorney or tax adviser.
Rita Sollie, Direct Insurance Representative with North Coast Life Insurance Company (NCL). No gimmicks or schemes here, just genuine and honest service. We don’t sell insurance, we solve problems. I welcome the opportunity to show you what NCL can do for your Life Insurance and Financial needs.
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