What does Estate Tax mean? Read on to discover the definition & meaning of the term Estate Tax - to help you better understand the language used in insurance policies.
Estate tax is levied on the transfer of the net value of assets of a decedent to the heirs of the estate. The tax, however, does not apply to an estate transfer to a surviving spouse. Nevertheless, upon the demise of the surviving spouse, the beneficiaries incur the estate tax. In terms of insurance, a life policy purchased by the decedent can ensure their heirs receive a value equivalent to the estate while avoiding the estate tax incurred during a transfer of assets.
We hope the you have a better understanding of the meaning of Estate Tax.