Tuesday, May 26, 2009
Keep Tabs on Insurance That Covers Estate Tax
Using life insurance to cover the death tax is common practice, but the strategy is blowing up some estate plans now.
The policies are imploding because of low interest rates. An insurance plan issued years ago, when interest rates were higher, may no longer be earning the investment returns it needs to pay premiums as drafted. That shortfall leaves the owner on the hook for unexpected costs.
If the worst happens and a policy collapses, its demise can even result in a big tax bill...
WSJ: Keep Tabs on Insurance That Covers Estate Tax
The policies are imploding because of low interest rates. An insurance plan issued years ago, when interest rates were higher, may no longer be earning the investment returns it needs to pay premiums as drafted. That shortfall leaves the owner on the hook for unexpected costs.
If the worst happens and a policy collapses, its demise can even result in a big tax bill...
WSJ: Keep Tabs on Insurance That Covers Estate Tax
Permalink posted by markw @ 4:47 AM 
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