Let’s say you perused our estate-tax liability table (want another look?) and said, ‘Hey, that could be me.’ Well, here’s a way to get an inheritance to your children without the middle (tax) man getting in the way. Remember, when you leave all your assets in your estate, they can be subject to a severe estate-tax haircut before they ever reach your heirs. Assets outside of your estate and, for example, in an irrevocable life insurance trust funded by life insurance, bypass the toll road and arrive intact.

Simply put, this strategy requires the establishment of a trust and the purchase of life insurance. In exchange for relatively low policy premium payments, you can get a high-death-benefit policy. At your death the trust pays the life insurance proceeds directly to your heirs, free of income and estate taxes.

If this option has appeal, you’ll definitely want to consult an attorney to get a complete explanation of the strategy and have papers drawn up. Also, the attorney can help make certain you have the resources required to set up and sustain such an arrangement.