Tax law and estate planning are unquestionably complex, yet they often go hand-in-hand. When writing or litigating an estate plan, reducing tax liability is usually the key to maximizing payout as either a grantor or a beneficiary. Different investment options have a varying tax liability, so each grantor should understand how they can be applied to a family's financial situation.
New life insurance policies may have the attention of the IRS
An investment option that appears to be working well for grantors and beneficiaries is raising some eyebrows in the Internal Revenue Service, according to Bloomberg. "Insurance dedicated funds (IDF)" are part of private life insurance policies. Investors contribute money as insurance dedicated funds, but because the funds are managed by the insurance company and not the investor, they are not taxed as capital gains funds.