People often feel safe from the Federal estate tax because they do not meet the $5.43 million threshold. Some unsuspecting middle-class households might exceed the exemption if they have a large life insurance policy, house, retirement account, or any other assets that could push them over the threshold. It is also important to watch out for any State estate taxes that might impose a threshold that is lower than the Federal one. When making plans for leaving life insurance to loved ones a person might consider setting up an irrevocable life insurance trust. People should consult with a professional estate planner if they have any questions about what they need to do to plan ahead.
See Bill Bischoff, You may be exposed to estate taxes without realizing it, Market Watch, July 21, 2015.
Special thanks to Jim Hillhouse for bringing this article to my attention.
