Understanding Life Insurance Trusts
How to Reduce or Eliminate Your Estate Tax Cost
4. What makes up my net estate?
To determine your current net estate, add your assets then subtract your debts. Many people are surprised that insurance policies in which they have any "incidents of ownership" are included in their taxable estates. This includes policies you can borrow against, assign or cancel, or for which you can revoke an assignment, or can name or change the beneficiary.
You can see how life insurance can increase the size of your estate and the amount of estate taxes that must be paid.