If you own life insurance policies at your death, the proceeds will be included in your estate. The way around this problem is to not own the policies when you die. Ownership by your children can be a good option when your primary goal is to pass wealth to them. Proceeds aren’t subject to estate tax on your or your spouse’s death, and your children receive all of the proceeds tax-free. On the downside, policy proceeds are paid to your children outright. This may be problematic if a child has creditor problems. Contact us with questions on other owner types.