How To Avoid Estate Taxes On Life Insurance? 
To avoid life insurance death benefits from inflating the taxable estate of the life insured , it would be necessary to ensure there are no incidents of ownership . There are a few ways this is normally done . One is to set up an Irrevocable Life Insurance Trust to be owner and beneficiary of the life insurance . Money for premiums could be gifted by the grantor -LRB- also insured -RRB- to the trust . Another way would be for adult children to own and be beneciary of the policy on the insured -LRB- parent -RRB- . 