Where there's a death tax, there's life (insurance)

Below, Jim Gust hints that the insurance industry is responsible for keeping the estate tax on life support. Immediate confirmation appears in today's Wall Street Journal. Subscribers can turn to Estate-Tax Plans Get Tricker:"

Despite a full-throttle effort, Congress has so far failed to kill the estate tax -- or even enact a compromise that would permanently reduce the hit. Though there's still time for a compromise deal, the tax is currently scheduled to disappear in 2010 and then bounce back again, at higher rates, in 2011.

That's making it trickier than ever to formulate an estate-tax plan, which often includes buying a life-insurance policy. Such a policy often plays a central role in estate planning, whether it is used to pay off a big estate-tax bill after you die or to leave something to a child who didn't get a piece of the family business.

Of course, as the article also notes, that dratted estate tax isn't exactly bad for trust business:

Once you figure out what you need, advisers say it is wise to make the contract payable to an irrevocable life-insurance trust, so that the insurance proceeds -- which aren't subject to income tax -- don't become part of the estate and thus subject to estate tax. It also keeps proceeds safe from your children's or heirs' spouses in the event of a divorce.