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Life Insurance Trusts and Federal Estate Taxes
While most estates are not subject to the federal estate tax, those estates valued in excess of $1.5 million in the year 2004 are. To compensate for these taxes, those concerned about passing on all they're worth, often purchase life insurance to provide additional funds from which to pay these taxes. Without your knowing it, the life insurance may just be adding to the tax it was meant to pay. For more information...