Free life insurance estate worksheet. Estimate how policy ownership changes a taxable-estate scenario using the exemption amount you want to model.
Life insurance death benefits are generally income tax-free to beneficiaries. In estate planning, the bigger question is often whether the policy is owned in a way that causes the death benefit to be treated as part of the taxable-estate scenario you are modeling.
This page is a worksheet for comparing ownership structures and exemption assumptions. It is not a live estate-tax table and does not attempt to publish current law amounts.
Use it to compare a policy you own directly against an ILIT-style structure or other ownership assumption, then confirm the actual planning result with counsel.
Life insurance intended to provide for your family can have very different estate-planning outcomes depending on how the policy is owned. This worksheet helps you compare those scenarios without pretending to give a live-law answer.
Estate With Insurance = Estate Value + Death Benefit Estate Tax = max(0, (Estate With Insurance − Exemption)) × reference rate ILIT Savings = Estate Tax With Insurance − Estate Tax Without Insurance
Result: $1,000,000 estate tax
Estate $14M + $3M death benefit = $17M. Minus $15M exemption = $2M taxable. Using the worksheet reference rate plus the example 10% state rate, the estate tax amount is $1,000,000. Without the insurance in the estate, the $14M estate would be entirely exempt under this scenario.
An ILIT is most useful when you want to compare direct ownership against trust ownership in an estate-planning worksheet. It is also useful when you want to see how a death benefit changes the taxable-estate scenario you are modeling.
Establishing an ILIT can involve legal fees and ongoing administration. Those costs are separate from the estate-tax worksheet and should be evaluated on their own.
This page is intentionally framed as a scenario worksheet. If the policy ownership, transfer timing, or exemption assumption changes, rerun the worksheet with the updated inputs.
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This page is a planning worksheet, not a legal conclusion about estate inclusion. It applies the estate value, death benefit, and exemption assumptions you enter to compare ownership scenarios such as direct ownership versus an ILIT-style structure. The worksheet is meant to help users compare estate-planning cases, not to determine how a court or the IRS would treat a specific policy.
Life insurance death benefits are generally income tax-free to beneficiaries. This worksheet focuses on whether the death benefit is part of the taxable-estate scenario being modeled.
An Irrevocable Life Insurance Trust is a trust that can own life insurance policies and keep them outside the insured person's ownership scenario. The worksheet shows how that changes the result.
Yes, but the estate outcome depends on ownership, transfer timing, and the scenario assumptions you enter. The worksheet lets you compare ownership setups without making a legal conclusion.
Premiums are often funded by annual gifts or other trust funding methods. The exact tax treatment depends on the structure you use.
The trust receives the death benefit and then distributes or manages it according to the trust terms. The worksheet simply shows how that ownership assumption changes the estate-side estimate.