Cover Estate Taxes:
By: Wasserman, Phillip Roy
In most cases, taxes are due at death, creating a burden for those who are left behind. Estates can be taxed; so can IRA’s, annuities and a long list of other investments. Needless to say, someone has to write a check to pay the tax, and the “liquidity” of an estate is sometimes limited, especially when one passes away with generally illiquid large real estate holdings and relatively speaking low cash amounts. In many cases, a quality life insurance policy can be a beneficial “gift” to leave behind so that taxes are paid from the tax-free death benefit the life insurance provides.