Writing a check for your life insurance premium may not be up there with getting a hot stick poked in your eye, but it certainly isn’t as soothing as writing a check for a Carribean vacation either.

So, if I asked you this. Do you like writing checks to the IRS? If you could avoid writing a check to the IRS by writing a smaller check to a life insurance company, would it make that premium payment at least slightly more pallatable?

I’ve had clients on complete opposite sides of the mountain when it comes to the issue of estate taxes. Some are right with the program. Show them an affordable way to keep their estate intact for their heirs and they are on board. Others have point blank told me that they don’t really care because they’ll be dead.

Let me just turn on the lamp over this mess on the table. If you have a substantial estate and have not put anything in place to protect it, when you die, your heirs will have 9 months to make sense of it all, determine the value, and liquidate enough of the estate to pay the estate taxes. It is precisely this scenario that plays out with easily half of taxable estates.

The result is that often as much as half of what you worked your entire life for will not be passed on to your family, many of the assets you have accrued will be sold off for pennies on the dollar due to the time limit, and your heirs are probably going to wonder how, if you were smart enough to create all of that wealth, why weren’t you smart enough to protect it.

Bottom line. Estate taxes are a fact of life. Even if the US government repeals estate taxes, states stand ready to increase state death taxes to continue the taxation from another direction. Life insurance owned by a life insurance trust can pay those taxes for pennies on the dollar. Who would you rather write a check to?