If you’re planning on making the most of estate planning, you should focus on what your goals are as well as how you can best achieve them. Life insurance plays a critical role in the estate plans of many people. To make the most of life insurance, however, it’s a good idea to first articulate your goals then consider how life insurance could help you achieve these goals. This article can review some of the most helpful ways that you might decide to use life insurance as part of your estate plan.
Replacing Income
Many people obtain life insurance as a way to replace income and make sure that loved ones still have funds as well as the ability to remain at home. If you’re in your peak earning years, which run from 35 to 55, income replacement is particularly critical to consider. While the risk of death might be low for a person at this age, death has the greatest potential to impact the lives of those around you. There will be a substantial amount of your challenges for your loved one to face if something happens to you.
Educational Costs
Another common way to use life insurance is to establish a policy and later leverage its cash value to pay tuition. If you proceed in such a manner, you will likely need a high rate of return before you can obtain enough funds to pay education costs. If you proceed in this manner, the cash value of your policy does not proceed to the expected family contribution for financial aid consideration. This means that sometimes people who pursue this route can also obtain grants or student loans.
Estate Fees
Life insurance can be utilized to make sure that you pass on your estate efficiently and in the desired manner. There will always be expenses associated with an estate, and life insurance can provide some help in paying for estate fees and other expenses associated with your estate. Life insurance can also help individuals with high-value estates to transfer a large number of assets efficiently. Other people realize that life insurance can be utilized to reduce estate taxes.
Planning for Retirement
Even though there’s a saving element, life insurance should not be viewed as an investment. Instead, life insurance is best viewed as a conservative tool that helps you place dollars on a tax-deferred basis. If put together and adequately funded, it’s also possible to withdraw tax-free funds over time that can be used to supplement your retirement. Some people also utilize life insurance to replace the income from their pension or social security. These funds can also be used to pay for long-term care costs.
Contact an Experienced Estate Planning Attorney
If you or a loved one needs help deciding how to best achieve your estate planning goals, one of the best things that you can is to obtain the assistance of a compassionate attorney. Contact Ettinger Law Firm today to schedule a free case evaluation.