Source One: Savings and Investments
Your heirs could liquidate the stocks and mutual funds in your estate to pay estate taxes.
But that leaves less for your heirs. And if heirs are forced to liquidate such assets in a
depressed market, the monetary losses could be serious. Plus, there's no guarantee that
the value of these assets will be enough to pay the taxman.

Source Two: Non-Liquid Assets
A forced sale of non-liquid assets, such as business interests or real estate means more
money lost from the estate. And again, there's no guarantee your heirs will get full value
for these assets, particularly if they're forced to sell quickly or in a down market. In
addition, sale of these assets usually entails selling commissions and other expenses,
further depleting the value of your estate.

Source Three: Credit
If a loan is used to pay estate taxes, both principal and interest must be repaid. Where
will that money come from? Loans only temporarily postpone the day of reckoning.

Source Four: Life Insurance
Proceeds from life insurance provide immediate cash for paying estate taxes without
depleting the estate itself Moreover, the cash from a life insurance policy can be received
by heirs free of federal or state income tax. And the cost of providing this cash -- the life
insurance premiums -- amounts to just pennies on the dollar.