Estate Tax and Life Insurance
If you own assets, you may have a Federal Estate Tax or State inheritance tax. Simply put, this means that nine months after you die, your estate must write a check to the IRS to pay this tax. The IRS does not want your building, your art or even your stocks and bonds. They only accept cash. If your estate is not liquid your heirs may have to sell off your assets at an in opportune time at a bargain price. (have you ever been to an Estate Sale? Why? Because of the bargains!) Or borrow the money to obtain the cash. However, we have a better solution.
Life insurance has long been a staple in basic planning. A properly owned and maintained policy can supply your heirs with the cash they need to pay the tax bill without disrupting your estate.