Life insurance can be a part of an estate, but it depends on how it is structured and designated. When a person passes away, their estate includes all of their assets and liabilities. Life insurance proceeds can be included in the estate if the policy owner has not designated a specific beneficiary or if the estate is named as the beneficiary. In such cases, the life insurance proceeds will go through the probate process and be distributed according to the terms of the will or the laws of intestacy if there is no will. However, if the policy has a designated beneficiary, the proceeds will bypass probate and go directly to the beneficiary. This can be advantageous because it allows the beneficiary to receive the funds more quickly and without the costs and delays associated with probate. It's important to note that life insurance proceeds are generally not subject to income tax, but they may be subject to estate tax if the total value of the estate exceeds the applicable exemption amount. To ensure that life insurance proceeds are distributed according to your wishes and to minimize potential tax implications, it's recommended to work with an estate planning attorney or a financial advisor who specializes in estate planning. They can help you review your life insurance policies, designate beneficiaries, and create a comprehensive estate plan that aligns with your goals and objectives.