Creating a well thought out estate plan is a responsible, pragmatic approach to taking care of your family, passing on your assets, business, and legacy to the next generation. However, we all see ourselves living for a very long time and forget to think through immediate issues that will arise in the case where you pass on unexpectedly. Things like being prepared for final expenses, outstanding debt and of course, the inevitable needs of your family when you are gone; not to mention the inevitable tax bill that comes with many business owners who wish to pass on a significant inheritance. As part of your well thought out estate plan, I strongly insist upon reviewing and updating your life insurance policy as part of your estate plan.
For those left behind the immediate grief of losing you is often compounded by the immediate financial burden and the potential complications associated with your death. Life insurance can be utilized to cover final expenses, which today can run well into the five figures plus any uncovered unexpected medical expenses. Real estate, investments and bank accounts can be accessed but maybe not as quickly as needed to cover final expenses, outstanding debt, and unexpected medical expenses.
Other life insurance benefits to your estate plan may include paying off mortgages, providing child support, or continuing care for elderly family members you have committed to care for. Having access to financial means to continue these obligations means your loved ones avoid stressful and lengthy probate processes which makes it inconvenient to access assets needed to support your family. Conversely, life insurance proceed payouts are private and can be made available to support your family as part of your estate plan. You may not think access to liquid assets is critical now, but your loved ones will be very grateful if you planned for them when you are gone.
Finally, a life insurance benefit can help with balancing any asset discrepancies between heirs. For example, if one heir wants to keep the family farm and the other wants to sell the asset (for the money), life insurance proceeds can be used to compensate the one heir and save the farm or business for the other heir. Many families believe there won’t be any problems because “we’re all family.” My experience tells me that is a recipe for family discord and life-long disasters. Combining the right life insurance policy within your estate plan may be the best way to balance inheritances and maintain family civility.
Contact our team at Borkuslaw Group today and make a live or online appointment and request an estate plan life insurance consultation!
Please note that information contained in this news alert is not and should not be construed as legal advice or opinion nor does this information alert create an attorney-client relationship.