Life Insurance is an important component of estate planning. For some, it may be the only significant asset that actually creates an Estate. For smaller/”younger” estates, life insurance may provide a substitution of income, when the main income earner dies. For bigger estates, life insurance may provide the necessary, immediate funds to pay post-death expenses and taxes as well as serve as a secure investment. In business succession context, life insurance may be the sensible way to provide the cash necessary to buy-out the interest of the deceased business owner’s interest and carry on the business.

There are many different types of life insurance available, including: Term, Life, Universal, etc. A different type of insurance may be appropriate at different stages of your life. Also, the funds available to purchase insurance may dictate the optimal policy that you can obtain. Having a knowledgeable, diligent life insurance agent help you purchase your policy as well as review it periodically is critical to the financial stability of your family.

From Estate Tax purposes, it is critical to review your insurance to determine if the right person “owns” the policy, as well as whether the right person/entity is named the “beneficiary.”

The moral of the story is that it’s important to work with both your insurance agent as well as your Estate Planning attorney to make sure that you and your family are protected and not ignore the valuable tool of life insurance when thinking about your Estate Planning needs.

My office can recommend extremely competent life insurance agents to make sure that your Estate Plan is meeting its full potential.