Making an estate plan can be a complex process, so it is no surprise that people occasionally forget to factor in their life insurance policy while making plans. There are actually some excellent ways to use your policy in your estate plan though, whether you are looking for ways to save your beneficiaries on some expenses or you want to make sure everyone gets a fair inheritance. A Woodland Hills, California estate planning attorney from our firm is ready to help you figure out the best use for that life insurance policy.
What Types of Expenses Can a Life Insurance Policy Pay For?
Your life insurance policy can be used to pay off a variety of expenses, including your final expenses. We can help you make sure that your policy covers these kinds of charges so that your family does not have to worry about paying out of the estate or their own pockets for expenses like:
Funeral costs: Funerals can cost thousands of dollars. If you do not want your family to be stuck paying for yours, then you can make sure that your life insurance policy covers this expense.
Final income taxes: If you owe back taxes or any taxes in the year that you pass away, your policy can cover those so that your beneficiaries do not have to worry about them.
Estate taxes: If you have a large estate that is subject to estate taxes, your insurance benefit can help cover that as well.
Outstanding debts: Any money that you currently owe to creditors can be paid off with your policy so that they do not become a burden to any of your loved ones.
What Else Can a Policy Be Used For?
A life insurance policy can also be used in a few other ways. One popular use is equalizing the estate. If you have some assets that are hard to divide, like a piece of property, a policy with the value of that asset can be used to give two beneficiaries an equal share of your estate.
You can also use it to fund any ongoing expenses. If you were caring for a sick relative, a minor, or a loved one with special needs, the money from a life insurance benefit could be put into a trust that would continue to provide for them.
What Kind of Life Insurance Do I Need to Have?
Two different types of policies can usually be used in an estate plan. Term life insurance, which lasts a certain number of years, and whole life insurance, which lasts until a person passes away, can both be valuable resources.
Talk to Our Estate Planning Lawyers
When you are ready to make an estate plan of your own, do not tackle this important project all by yourself. Contact the Law Offices of Yacoba Ann Feldman and talk to some professionals. We will make it easy to develop the best possible estate plan for you and your beneficiaries.