How much life insurance do you carry? Just enough to cover your funeral expenses? Enough for your stay-at-home partner and your children to make it through until the kids have finished college? Enough for your spouse to live comfortably to the end if he or she invests the money wisely? In estate planning terms, does it even matter? Actually, no. What counts is: Will your life insurance, once it is paid out, push the value of your estate over the tax-free limit?

As I mentioned before, the number of people who need to worry about estate taxes is very small. Less than two out of every 1,000 estates pay this so called “death tax.” Most others, i.e. more than 99 percent of all property owners, can claim exemptions that will get them off the hook. To be specific, for deaths in 2015, the individual estate tax exemption was set at $5.43 million, and until the law changes we can expect this sum to rise each year to reflect inflation.

If you are concerned that the benefits from your life insurance will bring your estate into the taxable range you should prepare accordingly. You can do so by creating a life insurance trust or by giving the policy to someone else. Both tools will keep the benefits of your policy out of your taxable estate.

Of the two options, giving away your policy is definitely the easier one, but it’s also quite risky. First, you might have to pay a gift tax, and second you’re giving another person control over your life insurance. The new owner of the policy will be free to change its beneficiary, to borrow against it and to cancel it altogether. My advice: If you choose this route be sure that you can trust the recipient of your gift.

Life insurance trusts are definitely the safer option, but they are complicated to set up, and you will need the help of an experienced attorney. The basic rules for these trusts are nevertheless straightforward and easy to understand: Life insurance trusts must exist for a minimum of three years before you die, they must be irrevocable, and you cannot be the trustee. Because of the last two requirements you will forfeit control over your life insurance — but since you have now placed it in a trust you need at least not worry about someone else changing or canceling the policy.