When considering the components of a comprehensive estate plan, life insurance policies often go overlooked.
Like others, you may not realize how beneficial it can be to manage life insurance policies through an estate plan. It can improve life for your loved ones while offering several strategic estate planning advantages. Here is a closer look at why life insurance might be a valuable addition to your plan.
Give your family security
One of the main reasons to include life insurance in your estate plan is to continue providing financial stability for your heirs and beneficiaries. The death benefit from a life insurance policy can help cover living expenses, pay off debts and provide a financial cushion during a difficult time.
Cover estate taxes
Life insurance can be an effective tool for covering estate taxes. The proceeds from a life insurance policy can be used to pay estate taxes, helping to ensure that your heirs receive the full value of your estate without the need to liquidate any assets.
Equalize bequests
If you have assets that are difficult to divide, such as a family business or complex real estate holdings, life insurance can help balance inheritances among your heirs. Providing a cash benefit to those who do not receive a share of difficult-to-divide assets helps to ensure a fair distribution.
Fund a trust
Life insurance proceeds can also be used to fund various types of trusts, such as a special needs trust or a trust for minor children. When you have vulnerable family members, this can help to ensure that the trust provides the long-term financial support they may need to thrive.
Consider speaking with an experienced legal representative for additional guidance in strengthening or creating your Nevada estate plan.
