Life Insurance Can Assist With Estate Planning
Life insurance exists to protect your loved ones after your passing and ensure they have sufficient resources to get by in your absence. It can also be a critical tool for your estate planning.
Here are just a few instances where life insurance can be helpful as you plan your estate:
- Covering end-of-life expenses: Life insurance proceeds can be used to cover funeral expenses, debts and final income taxes. This removes some significant financial stress on your loved ones, who are already going to be dealing with the stress associated with losing someone important to them.
- Business buyouts: If you own or co-own a business, your loved ones might have financial barriers to being able to buy out your portion of the business. Proceeds from life insurance payouts can help with this.
- Paying estate taxes: If you have a high-value estate, you could put life insurance proceeds toward estate taxes to reduce your tax responsibility. These proceeds could also be used to offset taxes due on inheritances.
- Equalizing an estate: If you find it difficult to split up some of your assets, you can use life insurance proceeds to make matters more equal. There are all kinds of creative ways to use life insurance funds to make sure your loved ones have a fair share of your inheritance.
- Avoid probate: Life insurance proceeds bypass the probate process, so having such a policy in place is one way to ensure your beneficiaries get at least a portion of their inheritance relatively quickly.
For more information about how life insurance is beneficial for estate planning purposes, contact an experienced Tampa, FL estate planning attorney at BaumannKangas Estate Law.