Philip J. Michaels and Brian G. Smith of Fulbright & Jaworski write: Properly sheltering life insurance proceeds from estate tax as well requires more complex planning. With proper estate planning, one can shelter life insurance proceeds from all federal and state tax, but the Transfer For Value Rule is a landmine that must be carefully avoided, or else one could potentially lose all of the valuable benefits afforded life insurance policies and proceeds.
Protecting Life Insurance Proceeds From Tax and Other Legal Landmines
New York Law Journal
September 16, 2013