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How to Use Life Insurance in Estate Planning

life insurance in estate planning

Do you know why considering life insurance in estate planning is so important?

A lot of times, people don’t think about life insurance in estate planning. Instead, many people begin thinking about buying life insurance when they start a family.

Typically, the kind of life insurance they get is what is known as Term Insurance. You pay premiums until you reach a certain age.

There are many kinds of life insurance, each designed to help achieve specific objectives. This makes life insurance a confusing subject. However, it doesn’t have to be so.

When the right type of life insurance policy is incorporated into a comprehensive estate plan it can play a very important role in providing for your beneficiaries.

For instance, life insurance can help your beneficiaries cover immediate expenses after your death. This can include medical bills, funeral costs and other final expenses. Life insurance provides direct and quick access to the funds without going through the probate process.

One of the primary uses of life insurance is to provide funds to pay estate taxes.

The death benefit from a life insurance policy can be used to cover these taxes. This prevents your heirs having to liquidate other estate assets that may take time such as real estate to meet tax obligations. And, if you are intending to use your life insurance policy to cover estate taxes, there’s more to consider. You’ll want the policy to be held in an Irrevocable Life Insurance Trust. This way, it doesn’t add to your taxable estate.

Your estate planning attorney will provide information about the many kinds of life insurance and what is most appropriate for your individual needs and requirements.

By carefully selecting the right type of policy, designating appropriate beneficiaries and considering the use of trusts, life insurance plays a vital role in comprehensive estate planning. If you would like to explore how life insurance can benefit your heirs as part of a comprehensive estate plan give my office a call at (470) 235-7868.

   

Looking to find an experienced estate lawyer in the Georgia area who is skilled in asset protection and estate plan preparation? Shannon Pawley is an attorney in Georgia with expertise in estate planning and asset protection. Shannon can provide assistance with creating an estate plan to include making a will and how to establish a trust properly. If you have questions about asset protection or questions about making an estate plan, reach out to Shannon and she will be glad to help answer all the estate planning questions you might have!

 
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