Don’t Let Your Life Insurance Be Taxed

2011 Is Just Around the Corner

2011 seems like a long way away. Heck, 2008 isn't even two months old. But if you're looking at it from an estate tax point of view, 2011 is just around the corner. Failure to plan ahead could result in more of your money going to the government instead of your family.

First, let's look at the current state of the estate tax. This year, everyone has a two million dollar estate tax exemption. This means every individual can pass up to two million dollars to their heirs free from tax. Next year that exemption goes up to three and a half million, and in 2010, there is no estate tax. Sounds great, but in 2011, under current law, the exemption drops down to one million dollars. In 2011, a lot of people that have nothing to worry about over the next three years will suddenly have a taxable estate. So why worry about that now? Because of the three year look-back period used by the IRS.

Of all the assets in an individual’s estate, life insurance is probably the easiest to remove. Life insurance proceeds are not subject to income tax, but they are subject to estate tax if they were owned by the deceased at the time of death. So, by transferring the ownership of the life insurance it is possible to eliminate the proceeds from the estate and reduce the estate tax. However, if this is done within three years of death, the IRS can pull it back into the estate and the death benefits will be taxed as part of the estate. Few people buy life insurance with the intent of giving almost half to the government.

Therefore, if you have an estate that does or likely will exceed one million dollars in 2011, it’s not too early to begin thinking about adjusting your assets to ensure more goes to your heirs, and less goes to the government. Please be aware, transferring ownership of life insurance can create a lot of unintended consequences. Be sure to consult with your financial advisors before making any transfers.

If you have any questions or would like additional information regarding this article please write us at Firm@Scovills.com or call us at 941-365-2252.

Differences Between Business Entities

Special guest Tom Pellegrino, of Eaton, Honick, Pellegrino & McFarland, P.A., discusses the differences between commonly used business entities.

Mr. Pellegrino is a Certified Public Accountant and can be reached at 941-365-1172 or Tom@ehpepa.com.

To learn more about this and other issues, visit us at http://www.scovills.com/. We are a Florida Law Firm practicing in the areas of Estate Planning, Guardianship, Probate and Business Law.

Watch the Video

Issues to Consider When Considering Divorce

In this video special guest Terry McCormick discusses issues you should consider when considering a divorce.

To learn more about this and other issues, visit us at http://www.scovills.com/. We are a Florida Law Firm practicing in the areas of Estate Planning, Guardianship, Probate and Business Law.

Watch the Video

Issues to Consider When Considering Divorce (Audio)

In this Audio Program special guest, Terry McCormick, discusses issues you should consider when considering a divorce.

To learn more about this and other issues, visit us at http://www.scovills.com/. We are a Florida Law Firm practicing in the areas of Estate Planning, Guardianship, Probate and Business Law.

Limited Liability Companies

This video discusses Limited Liability Companies, their characteristics and uses.

To learn more about this and other issues, visit us at www.Scovills.com. We are a Florida Law Firm practicing in the areas of Estate Planning, Guardianship, Probate and Business Law.

Limited Liability Companies (Audio)

This Audio Program discusses Limited Liability Companies, their characteristics and uses.

To learn more about this and other issues, visit us at http://www.scovills.com/. We are a Florida Law Firm practicing in the areas of Estate Planning, Guardianship, Probate and Business Law.

Guardianship Avoidance (Audio).

This Audio Program discusses the proper methods to avoid guardianship in the event of temporary or permanent incapacity.

To learn more about this and other issues, visit us at http://www.scovills.com/. We are a Florida Law Firm practicing in the areas of Estate Planning, Guardianship, Probate and Business Law.

Guardianship Avoidance.

This video discusses the proper methods to avoid guardianship in the event of temporary or permanent incapacity.

To learn more about this and other issues, visit us at http://www.scovills.com/. We are a Florida Law Firm practicing in the areas of Estate Planning, Guardianship, Probate and Business Law.

Estate Planning for Parents of Minor Children (Audio).

This Audio Program explains the issues that should be considered by parents of minor children. If you don't have a will or a trust, and a designation of guardian, then you are leaving your children's future to chance.

To learn more about this and other issues, visit us at www.Scovills.com. We are a Florida Law Firm practicing in the areas of Estate Planning, Guardianship, Probate and Business Law.

Naming a Guardian for Your Children (Audio).

This Audio Program discusses the reasons to designate a guardian for your children and the proper methods to ensure your designation is effective. If you don't have a will or a trust, and a designation of guardian, then you are leaving your children's future to chance.

To learn more about this and other issues, visit us at http://www.scovills.com/. We are a Florida Law Firm practicing in the areas of Estate Planning, Guardianship, Probate and Business Law.

Naming a Guardian For Your Children

This video discusses the reasons to designate a guardian for your children and the proper methods to ensure your designation is effective. If you don't have a will or a trust, and a designation of guardian, then you are leaving your children's future to chance.

To learn more about this and other issues, visit us at http://www.scovills.com/. We are a Florida Law Firm practicing in the areas of Estate Planning, Guardianship, Probate and Business Law.

Estate Planning for Parents of Minor Children.

This video explains the issues that should be considered by parents of minor children. If you don't have a will or a trust, and a designation of guardian, then you are leaving your children's future to chance.

To learn more about this and other issues, visit us at www.Scovills.com. We are a Florida Law Firm practicing in the areas of Estate Planning, Guardianship, Probate and Business Law.