Estate planning is not easy. It is important to go over your estate plan many years before it will be administered, but a lot can change during the years between. How do you properly develop an estate plan when your future plans may change? You may end up remarrying, or taking on a dependant unexpectedly. Luckily, in many of these kinds of situations, life insurance can help you.
Permanent life insurance
Purchasing permanent life insurance can help you and your estate deal with a variety of situations that may arise during the course of your life. The proceeds from a payout are payable when needed and also tax-free. There is a guaranteed amount that you will know up front as well. These are some of the common unexpected estate planning needs that permanent life insurance can meet:
Making things equal
You can use your life insurance to provide one child a guaranteed inheritance amount when you plan to give another child ownership of an indivisible asset, like a vacation property for example.
If you go through a divorce with your first spouse and then remarry, permanent life insurance can give you the means to give an inheritance to your children from the first marriage while also providing for your current spouse.
The cost of your funeral and your debts could be covered under permanent life insurance. Some people purchase a life insurance policy for this reason alone, so other assets will not need to be liquidated in order to cover the costs.
A tax-free inheritance
If you leave a life insurance pay-out to your beneficiaries, you are gifting them funds that are free from tax that won’t be delayed by estate administration. They would also be free from any costly probate fees.
Taking care of a dependant
If you have a dependant like a child or grandchildren with special needs, you can use your life insurance proceeds to go towards their day-to-day care.
Permanent life insurance is an important tool that shouldn’t be overlooked when planning your estate. Your unique needs may change over the course of your life, so it’s good to have a tax-free vehicle like life insurance available for you to use for a variety of potential scenarios. Talk to an estate planning advisor at The Beacon Group of Assante Financial Management Ltd. to learn more about how permanent life insurance can help your estate.