Many people think of estate taxes as a problem just for rich people. But even with favorable legislation last year, even ordinary people need to pay attention to estate taxes.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, explains why ordinary people should pay attention to estate taxes. Dan notes that even with exclusion amounts of $5.25 million, the inclusion of certain property can make taxable estates balloon higher than many people think. In particular, Dan gives the example of life insurance, with many people not taking advantage of the willingness of insurers AIG (NYSE:AIG), Hartford Financial (NYSE:HIG), and other insurance companies to use life-insurance trusts to avoid potential estate-tax ramifications. Dan concludes with discussion of different state laws on estate taxes, pointing out that many states have much lower amounts above which estate taxes might be due.

Fool contributor Dan Caplinger owns warrants on AIG. The Motley Fool recommends, owns shares of, and has options on AIG. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.