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Kantrowitz, Goldhamer, Graifman, Perlmutter & Carballo, P.C.

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Written/Reviewed By:

Barry S. Kantrowitz, Esq.

Last Updated: Apr 28, 2026

Read Time: 3 mins

Estate Planning Attorneys Reduce Estate Taxes with Trusts

We understand that life insurance can seem overwhelming, and with good reason. It involves complicated policies that have a significant effect on your loved ones’ futures. To be sure that your life insurance benefits go where you want them to, contact our estate planning lawyers. We can help you figure out the best plans for your family and ensure that you save as many tax dollars as possible.

Can a Life Insurance Trust Reduce Estate Taxes?

If you have estate taxes to pay after your death, life insurance can provide liquidity to pay those taxes. With proper estate planning, an insurance policy will pay the taxes at pennies on the dollar. To avoid having the proceeds of insurance on your life included in your estate for tax purposes, you might transfer ownership of an existing policy to an irrevocable life insurance trust (called an “ILIT”), or you might have the ILIT purchase a new policy, instead of purchasing the policy yourself. A properly structured life insurance trust will remove the insurance proceeds from both your own taxable estate and your spouse’s, saving substantial tax dollars in the process.

As indicated by its name, an ILIT is a type of irrevocable trust created during your lifetime. Each year, you pay the Trustee to pay the premiums. If done properly, neither your estate nor your heirs will have to pay taxes on your policy, and your life insurance benefits will pass to your heirs intact. They may receive the benefits either outright or in further trust.

Protect Your Spouse and Heirs from Estate Taxes

Although transferring ownership of a life insurance policy to your spouse or children is likely to exclude the proceeds from your taxable estate, that type of transfer might not be the best option. If you expect the insurance proceeds to provide liquidity for payment of estate taxes or debts, you may want those proceeds to be collected by the Trustee of an ILIT, who can use them to purchase assets from your Estate or to lend funds to your Executor. An individual insurance beneficiary might upset your careful planning.

Survivor Life Insurance Policies

Life insurance trusts may own policies on your life or your spouse’s life alone or in the form of a survivorship policy. A survivorship policy would not pay off until both spouses have died, which is when their heirs would need cash to pay estate taxes.

Need Information on Life Insurance Trusts from an Estate Planning Lawyer?

To discuss individual, joint and survivor life insurance trusts, contact our estate attorneys in New York or New Jersey at (866) 971-0927.

Kantrowitz, Goldhamer, Graifman, Perlmutter & Carballo, P.C.., can help you create a life insurance trust that meets your family’s needs. To arrange a consultation with our Bergen County or Rockland County life insurance planning attorneys, please call (866) 971-0927 or fill out our online contact form.

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   LWelsh 
 9 days ago
 
 
 Trustindex verifies that the original source of the review is Google. Clever and efficient.
  
 
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   Kenny Perlow 
 30 days ago
 
 
 Trustindex verifies that the original source of the review is Google. KGG Law, and Barry Kantrowitz in particular, set the bar high for what a thorough, practical, strategic, compassionate and smart lawyer can be. Everything about Barry's advice and representation was exemplary and the stress mitigation that resulted was invaluable. On top of that, the ultimate result Barry achieved was beyond what was reasonable to expect and we are forever grateful. Often, people say that you hire a lawyer to prevent a problem. Sometimes, unfortunately, you need an attorney to solve a problem and I could not recommend Barry and his firm any more highly in that regard.
  
 
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   Aliza Ali 
 94 days ago
 
 
 Trustindex verifies that the original source of the review is Google. My dad had a great experience with this law firm. From the very beginning, the team was professional, knowledgeable, and always willing to answer our questions. They kept us informed throughout the entire process and made what could have been a very stressful situation much easier to handle. We truly appreciated their dedication, honesty, and hard work. Thanks to their support, my dad felt confident every step of the way. We are very grateful for everything they did and would highly recommend this firm to anyone looking for reliable legal representation.
  
 
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   Jana Montero 
 97 days ago
 
 
 Trustindex verifies that the original source of the review is Google. I had a wonderful experience working with Sam Smith. He was very responsive, thorough, and easy to work with from start to finish. He walked me through everything clearly and made what started as a very stressful situation for me into something completely manageable. I would not hesitate to recommend him and the firm!
  
 
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   Mike Sakmann 
 103 days ago
 
 
 Trustindex verifies that the original source of the review is Google. I sought legal advice regarding an employment matter and had an excellent experience working with Sam Smith, Esq. at KGG Law. Sam was thorough, attentive, and took the time to listen carefully to my concerns before providing clear, thoughtful guidance. I appreciated the professionalism and care shown throughout the process, and I would confidently recommend KGG Law to anyone in need of legal assistance.
  
 
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   Liz Hecker 
 109 days ago
 
 
 Trustindex verifies that the original source of the review is Google. I can't say enough about this firm. They manage to comfort you during the whole legal process while staying professional and doing what is right. I would recommend them to anyone and also hire them again if I need legal help.
  
 
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   Brandy Miller 
 132 days ago
 
 
 Trustindex verifies that the original source of the review is Google. Kate is the best. She helped me very quickly, and was very attentive with all of my needs. So thankful for her
  
 
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   Mike Greenspan 
 145 days ago
 
 
 Trustindex verifies that the original source of the review is Google. Kate Carballo is a dedicated, passionate, and creative attorney whom I had the pleasure to lecture with at a state trial lawyer's conference. Kate's lecture demonstrated how she uses her innovative and "out-of-the-box thinking" to achieve outstanding results for her injured clients. That Kate is certified by the Supreme Court of New Jersey as a civil trial attorney is a testament to her skills, experience and commitment to excellence.
  
 
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   Jonathan Sampson 
 152 days ago
 
 
 Trustindex verifies that the original source of the review is Google. Was referred to KGG law by a friend and could not have asked for better legal representation. They walked me through every step of the process after my accident and began every call with “ how are you feeling” which was just one example of how much they care about their clients. They handled my case very efficiently, professionally and courteously. My attorney Kate Carballo was a rock star! So clearly experienced, she consistently made me feel at ease with the process. Highly recommend
  
 
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   Vinnie Kung 
 155 days ago
 
 
 Trustindex verifies that the original source of the review is Google. We had a great experience with the team at KGG Law. While it was a traumatic time for our family, they made it very easy for us and explained all of our options. They even performed due diligence to make sure that after our settlement, there would be no further issues which I think is even more important than the settlement itself. Thank you!

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