Life insurance and estate planning

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Your primary goal in purchasing life insurance should be to financially protect your beneficiaries in the event of death.

This peace of mind provides a level of security that family members will be taken care of. For this reason, when choosing your policy, you can be confident in the policy’s ability to complement your estate planning strategy.

WHAT IS ESTATE PLANNING?

Good estate planning allows you to manage your assets while you are alive and plan exactly how you want them to be distributed upon your death. Estate planning strategies are different for everyone. Various factors include your wealth, age, wealth, health, lifestyle, and more.

Some estates require only a simple will to decide how the property will go to the heirs. Complex financial situations require more specific instructions that a qualified local financial planner or insurance agent can help determine.

Buying a life insurance policy as part of your estate planning process will help your beneficiaries maintain a good standard of living without you.

LIFE INSURANCE BENEFITS IN ESTATE PLANNING

If you own a large amount of assets – including a home, vacation property, or jewelry – when you die, your beneficiaries may owe inheritance taxes when your estate is settled. They may be struggling with a large tax bill. Work with your local financial planner or insurance agent today to make sure these types of situations don’t happen again in the future.

IRREVOCABLE LIFE INSURANCE TRUSTS

An irrevocable life insurance trust is an arrangement that many people use to transfer their wealth in a tax-efficient manner. With this strategy, you buy a life insurance policy for yourself and transfer it to ILIT. Your heirs become the beneficiaries of the trust and the proceeds of the insurance policy are distributed to them after your death, usually tax-free.

Without ILIT in place, your policy’s death benefit will be included in your gross estate and may be subject to inheritance taxes. These are serious financial decisions with real ramifications, so make sure you have all the information you need to make an informed choice about what types of policies and accounts to put in place.


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