nun
Thinks s/he gets paid by the post
- Joined
- Feb 17, 2006
- Messages
- 4,872
So I've reached the goals of FIRE and now I'm thinking about estate planning. I have enough income from rent and a DB plan to cover my expenses and so my investments and DC pensions are left to compound. I don't expect to have to worry about Federal IHT, but I'm already over the $1M estate tax threshold of the state where I live just on the value of my house. So I'm looking into ways to minimize tax. As I'm single I can't use a spouses exemption, I've considered simply moving to a state with a higher threshold, and giving to charity and using the $15k/person gift allowance, but the other option seems to be funding an Irrevocable Life Insurance Trust. This is where a trust holds a Permanent Life Insurance policy (I'm costing Universal Life from TIAA) and I gift the trust the annual premiums up to the annual gift tax exemption amount. The gift reduces the value of the estate, but more importantly the death benefit is tax free and can be used to pay state estate taxes and there might be something left over.
I need to do the math to see if the premiums would be better spent just staying invested, and I can give my heirs gifts to reduce the estate, but I first need to find out how much Universal Life coverage I might get as a healthy mid 50's guy. Has anyone considered or done this? Is it worth while? or is it like all the other things involving permanent life insurance....a bit of a gimmick?
I need to do the math to see if the premiums would be better spent just staying invested, and I can give my heirs gifts to reduce the estate, but I first need to find out how much Universal Life coverage I might get as a healthy mid 50's guy. Has anyone considered or done this? Is it worth while? or is it like all the other things involving permanent life insurance....a bit of a gimmick?
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