Don’t be mislead into thinking that estate planning is only for the wealthy. Estate planning can help anyone managing and preserving their assets and passing them on at death, in accordance with your wishes. This means, passing your asset on to your spouse or life partner, your children, other relatives or even your church or other non-profit organizations. What you may not realize is that life insurance can be a valuable tool, especially when combined with a will or trust. Here are a few of the benefits.
Preservation of family assets. If as a business owner who has worked long and hard to build your business, you are thinking of keeping the business in the family, you first have to consider which of your heirs will have the interest and ability to manage your business when you are gone. One solution that many financial professionals, attorneys and accountants recommend is the use a life insurance benefits to cash out other heirs that are either not qualified to run the business or simply don’t want to do it. This will preserve peace among family members while continuing the business.
Fair and equitable distribution of assets. Indeed, even with a plan in place, it could take quite a while before cash is discharged and circulated to beneficiaries. Costs such as burial service, business obligations and taxes can put budgetary constraints on your family that could mean diving into their own money or needing to sell assets while waiting for the estate to be settled. Tax free proceeds from a life insurance policy could help pay for these more urgent expenses.
A way to pay your estate taxes. One way to pay for estate taxes is to use the proceeds of a life insurance policy which is typically income-tax-free and is readily available. Estate taxes can be substantially high depending on the value of your estate and must be paid in cash within nine months of your death. Usually the assets from the estate are liquidated to pay for these taxes, but some assets such as real estate property are not easily liquidated on such short notice and can be expensive to liquidate.
Creating an estate for your family. Life insurance is one of the few contracts that by-passes the probate system and goes straight to the beneficiaries of your estate upon your death. The proceeds of a life insurance policy are tax-free and also asset protected. The later means that it is protected against your creditors.
If you would like to learn how you can grow a substantial amount of cash that you have access to at any time without penalties, is unrelated to the stock market, and will generate income that is not included in your tax return, visit our website at http://dev.infinitebankingsimplified.com/blog/ or feel free to email us your questions at ContactUs@InfiniteBankingSimplified.com or call us toll-free at 1-844-443-8422.
Isis B. Palicio, LUTCF, MBA
Pedro A. Palicio, MBA, Ph.D.
Infinite Banking Concepts® Authorized Practitioners