Service Leader

Joy Matak, JD, LLM

Joy E. Matak

Contact

Parsippany, NJ
973-472-6250
[email protected]

Service Leader

Lawrence M. Gradzki, CPA, JD, LLM

Lawrence Gradzki

Contact

Parsippany, NJ
973-472-6250
[email protected]

Life Insurance Planning

It’s important to evaluate life insurance coverage regularly to confirm that you have sufficient insurance in place but not too much to satisfy your insurance needs.  Consider the purpose of the life insurance:  Is it intended to replace your income? Is it intended to cover estate taxes? Did you buy it to care for minor children who are now grown?

Life insurance should usually be owned by a life insurance trust.  Estates are taxed on their value as of the date of an individual’s death.  If someone owns a policy on her own life, the value of that policy as of the moment of death is equal to the policy proceeds – all of which will be included and, potentially taxable as part of her estate.

Things to Consider:

  • Life insurance trusts need to be properly administered. The Trustee should understand and satisfy fiduciary obligations.
  • Transfers to the life insurance trust or premium payments are usually done through gifting which should be reported on a timely filed gift tax return.
  • Current proposals being considered by Congress may change how premium payments may be made for life insurance policies owned by trusts.

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