Who Pays Estate Tax On Life Insurance? 
Personal property has an owner . There are privileges and consequences of ownership . Life insurance is personal property . Life insurance always has an owner . That owner can be a person or a legal entity . The goal is not to pay estate taxes on life insurance . But it can occur at the federal and state level . The federal estate tax is uniform throughout the country . Within the federal unified credit , family assets transfer estate tax free . If assets exceed the unified credit allowance and are owned within the estate , theyll be subject to estate taxation . In addition , each state has its own threshold of asset exemption . So life insurance proceeds could exceed federal or state thresholds and could create a taxable event . So before moving forward with any estate plans or recharacterization of asset ownership consult your tax and legal counsel . 