Over the last several decades, life insurance policies have become accepted as valuable wealth transfer tools. Policy death benefits have the potential to create cash to increase family wealth and efficiently provide income tax-free funds to pay estate expenses, debts and estate taxes. One of the biggest challenges with a life insurance policy is how to prevent the death benefits from being included in the insured’s taxable estate. When death benefits result in an increase in a decedent’s estate taxes, it is as though the policy owner named the IRS as a partial beneficiary of the policy. To avoid losing some of the death benefits to estate taxes, attorneys and tax advisors often recommend that clients not own policies that insure their lives. They often advise clients with potential estate tax problems to have another person or entity own the policy.