Life Insurance can be a way to “Super Charge” your inheritance. For example, you may spend some thousands of dollars in life insurance premiums, but that may provide hundreds of thousands or even millions of dollars in death benefits when you pass on. If you have a good income stream, or you have a good set amount of money and you are willing to pay a single premium life insurance payment, those may guarantee an inheritance to your loved ones. It is also cheaper to buy the insurance if it is payable on a couple’s life and payable on the second death.
If you then have the Life Insurance purchased and held and payable through an Irrevocable Life Insurance Trust, that would keep it out of your taxable estate (so that it is not subject to Estate Taxes). You can have the death benefit invested and paid out to your loved ones over time, so that the investment may continue to grow, and provide an income stream for your loved ones during their lifetime and possibly your grandchildren and other heirs beyond.
Creating a sub-trust in the Irrevocable Life Insurance Trust may provide a Protective Trust for your loved ones. (This is also available under a Revocable Living Trust, aka Living Trust, aka Family Trust.) Therefore, the death benefit for your adult children may be protected in the event of a divorce, squander, or a car wreck lawsuit.
When you think about leaving your “Legacy”, you want to not only leave a moral and relational legacy, but you also want to look at the financial legacy you leave. If you have been successful you can provide for generations of your loved ones and do so without disincentivizing your children to work or putting the inheritance at risk for loss by squander, divorce or car wreck lawsuit.
At the Law Firm of Steven Andrew Jackson, Attorney and Counsellor at Law, we have helped hundreds of families protect themselves and their loved ones, avoid Estate Taxes and Probate Costs, and keep their Estate Plans current with the law through The Customized Protective Estate Planning Solution™.