Wills, Trusts and Life Insurnace Estate Planning

There is a lot to consider when it comes to estate planning, and how it will be divided upon your death. Without a plan in place, your heirs are likely to experience many inconveniences ranging from court room battles among family members, arguments over custodial arrangements of minor children, and feuds between family regarding the distribution of your assets and more.

We normally think of an estate plan as a set of instructions that will go into place once we pass. However, having a sound estate plan in place can also offer tremendous assistance should you become incapacitated. In this situation, it is vital to have someone who can make decisions for you as well as handle your personal and medical affairs.

Nearly every complete estate plan includes a life insurance policy. A life insurance policy provides many benefits ranging from income to support your spouse, paying for your children’s education, funding of retirement plans, and providing financial coverage for final expenses.

The amount and type of policy you choose will depend on the size of your estate and assets. For smaller estates, the main goal of a life insurance policy is to ensure the beneficiaries of the policy are well cared for. For larger estates, life insurance can be an essential component of your estate plan. The specific type of life insurance you’ll need for estate planning will depend on your unique goals and requirements. There are many different types of policies at a variety of price levels to consider.

Life Insurance Trusts:

Life insurance trusts provide the policy owner with more control over the funds that are paid from the policy, while also allowing you to reduce (and in some cases eliminate) estate taxes that would otherwise take money away from the funds you were leaving to your heirs.

Insurance trusts can reduce your estate taxes because the Insurance Trust owns the policies for you. This means that your taxable income from the amount of your estate is lower, thereby reducing the taxes you will have to pay.

There are two types of trusts to consider. Revocable and Irrevocable trusts:

Revocable Life Insurance Trust:
This arrangement allows the policy holder to name the trust as a beneficiary. This type of policy is excellent for younger families who need a more affordable but substantial insurance policy.

Irrevocable Life Insurance Trust:
This is an arrangement created to exclude any life insurance proceeds from the estate of the first and surviving spouse.

It would be best to speak with one of our experienced life insurance specialists who can help you determine which type of policy best meets your needs. Our agents can also give you a personalized quote based on the insurance option you feel is right for you. To speak with our agents, please call 1-800-963-6405 for assistance.

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