Life insurance serves a number of purposes in the estate planning realm, and it is most commonly utilized as a vehicle of income replacement.
Many younger adults fail to make preparations for the future because they feel as though this is something that only older people have to concern themselves with. But in fact, the children of senior citizens are probably going to be self-supporting. When you have dependent children estate planning is quite relevant, and making sure that you have adequate life insurance coverage is going to be part of the plan.
Most people are aware of the fact that life insurance often serves as a vehicle of income replacement, but it has other estate planning uses as well and one of them would be to balance inheritances.
Let’s say that you have a particular asset that comprise a significant percentage of the overall value of your estate, such as your house. For the purposes of this example suppose you have two children to whom you would like to give equal inheritances.
The family home means a great deal to your daughter and you know that she would love to inherit the property. Your son lives out-of-state and he already has his own dream home. You could balance the inheritances by leaving the house to your daughter while making your son the beneficiary of an insurance policy that equals the value of the home.
Life insurance can be an important part of many estate plans. To gain a comprehensive understanding of its various uses, sit down and discuss the matter with a good Indianapolis estate planning lawyer.
Paul A. Kraft, Estate Planning Attorney
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.
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