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Caring For Generations

In Estate Planning, Life Insurance Has a Big Part to Play

On Behalf of | Jul 31, 2019 | Estate Planning

There are at least three main ways in which life insurance can help protect your family and your financial goals, Fidelity Investments explains. Life insurance can:

1. Replace your income, helping ensure that your family can pay the bills, send children to college, or keep your business running.
2. Leave a legacy, transferring wealth to heirs or to charity on your terms.
3. Protect your retirement plan by providing an alternative source to cover long term care costs.

Life insurance can provide cash to pay taxes, administration expenses, and outstanding debts, adds.

As Hiram H. Lesar writes in the Washington University Law Review, “The principal role of life insurance, the type of insurance with which estate planning is primarily concerned, is to provide liquid funds to pay the costs of dying.” And, while many estates will not be subject to estate and inheritance tax, Lesar points out, “it is only through insurance that most people can hope to have enough assets to satisfactorily protect their families.”

At Geyer Law, we find life insurance to be a tool that can be used in every aspect of our estate planning work.

  • Clients who have worked hard to build their estates want to preserve those assets from creditors and divorce-related disputes in which their children might be involved.
  • Blended families can pose unique issues related to disputes among family members.
  • Special needs children need financial support, and life insurance can be the funding mechanism for Special Needs Trusts.
  • Life insurance plays an important role in charitable planning.
  • For our business owner clients, life insurance proceeds can enable businesses to survive following the death of a key employee or of an owner.

In “Estate planning using life insurance”, Merrill Lynch asks clients “What’s important to you?”, naming family, business, and philanthropy as three ways in which life insurance can help with what matters most.

In addition to our estate planning and elder law services, at Geyer Law we assist with business planning and formation, premarital agreements, issues faced by same-sex couples, and special needs planning, with life insurance proving a flexible and useful tool in all those areas.

– by Cara Chittenden