Don’t have $1 million? You still may need to worry about the Minnesota estate tax, which applies to persons holding more than $1 million in assets at death. Why? Life insurance. Life insurance proceeds paid out to your beneficiaries at your death get added to your assets for the estate tax tally even though you personally never benefit from the life insurance.
Life insurance held on your life and owned by an irrevocable trust is treated differently, but that’s another story for another day. Most people own their own life insurance policies.
A sizeable life insurance is one more reason for spouses to consider a trust so as to preserve the $1 million Minnesota estate tax exemption for each spouse. Visit an estate planning lawyer for details that apply to your individual situation.
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