Life insurance can be a powerful planning tool when used in conjunction with the remainder of your estate plan. Having an estate plan put together with the help of an experienced estate planning lawyer is helpful for outlining what you intend to accomplish in the future.
However, you should also engage other professionals, such as a CPA or financial planner to ensure that all of your plans are working together. Having a life insurance policy is the cornerstone of good financial protection. You probably assume that you don’t need life insurance until you have a family that you provide form and even then, sometimes life insurance does not come up on a person’s radar. However, there are four main reasons you want to consider purchasing a life insurance policy in conjunction with sitting down with an estate planning attorney to discuss your goals. These life milestones include;
- Being part of a blended family, which has complicated family dynamics. You could use this to provide for your new spouse, allowing your children to inherit other assets.
- You just started your own family and may need to replace income, pay for the child’s education, or pay for mortgage and car payments.
- Your estate is large enough to have estate tax liabilities. You could have state or federal estate taxes associated with your estate when you pass away. Life insurance can allow you to fund this liability or can be used to generate liquidity reserves that can be accessed to pay initial taxes and expenses once you pass away.
Regardless of how you choose to use your life insurance policy, you should discuss your options directly with an estate planning lawyer.