The higher estate and gift tax exemption amounts made permanent by the passage of the American Taxpayer Relief Act of 2012 (ATRA), as well as the higher income and capital gains tax rates for those in the top tax brackets, have prompted many practitioners to re-examine their clients’ estate plans. One area under particular scrutiny is the role of life insurance. Depending on the amount of an individual’s income and assets, it may now be prudent to increase the amount of life insurance to help reduce income and capital gains taxes; consider certain alternative life insurance products to better serve an individual’s needs; or even reduce the amount of life insurance and reallocate the assets to other strategies. Our Committee Report on Insurance in this month’s issue reflects the preoccupation with this topic, with as many different opinions as there are articles. In “Life Insurance After ATRA,” p. 40, Charles L. Ratner and Lawrence Brody point out the need to think about the new rubric of rules and how clients can both take advantage of and protect themselves from the tax consequences. In “A New Tax Environment,” p. 46, Richard L. Harris and Martin M. Shenkman show how wealthy clients, with estates under the exemption amount, can benefit from the income tax attributes of life insurance, and they explain the different ways to structure the insurance. And, in “Integrating Life Insurance Into Planning for Ultra-High-Net-Worth Individuals,” p. 51, Melvin A. Warshaw focuses on strategies for ultra-high-net-worth clients and how certain techniques may be in jeopardy based on some proposals that are now under consideration. 

But, not every article in our Committee Report is about taxes. We also have an article that focuses on insurance as it relates to the other certainty in life: death. Mark A. Teitelbaum suggests some ways to enhance a client’s internal rate of return, in “Using Life Insurance Policy Design to Maximize Death Benefit,” p. 57.