And Randy's lifeinsurance is already in a separate irrevocablelifeinsurancetrust for Penny and the kids, so it doesn't count against the exemption, either.
In one method, the insured sets up an irrevocabletrust to buy a life-insurance policy and pays the premiums by giving sums of money to the trust annually.
Whether the paid-up lifeinsurance should be in an irrevocabletrust or similar entities depends on whether the tax-free bonds are estate assets or outside the estate.