24 Apr WILL SECOND-TO-DIE POLICIES BECOME FIRST-TO-DIE WITH ESTATE TAX REPEAL?
Although it is unknown what suggested changes will be made to tax laws in light of the recent failure to overhaul the Affordable Care Act (Obamacare), President 
Trump has often asserted that federal estate tax should be eliminated. At the present time, only estates greater than $5,490,000 (if you are single) and double that amount ($10,980,000) if you are married are subject to federal estate tax. As a result, Americans with estates that are subject to federal estate taxes often purchase second-to-die life insurance policies (since it is less expensive) to pay for the estate tax after the second of the couple dies (normally there is unlimited marital deduction after the first spouse dies).
However, if the estate tax is abolished, the use of second-to-die life insurance policies will be significantly reduced.
It is possible estate taxes could get replaced with a new capital gains tax law. If that happens the second-to-die policy could be used to pay for that capital gains tax or for income taxes. However, even if the federal estate tax is repealed, it could eventually be reinstated. So, although second-to-die life insurance policies could be on life support if federal estate tax laws are repealed, one should consider all options before letting a policy lapse.
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