Life insurance planning is a critical component of a well-crafted estate plan. Insurance strategies can include many factors and be used in many ways, including:
- Personal risk management programs such as permanent cash value policies or whole life participating policies
- The use of corporately owned insurance policies that are focused on tax-efficient delivery of the value of corporate ownership to the beneficiaries should something happen to you
- Covering multiple lives and payout on the first death in a joint situation or multiple lives and payout only on the second death
- Efficiently paying any outstanding tax bills the estate would owe at the time of your death, the owner of the estate
- Bypassing the estate altogether and going directly into the hands of the beneficiary to assure that no creditors can attach to the payouts
- Ensuring privacy in cases where discretion and privacy are of importance
Why is creditor protection important?
Creditor protection is a critical component of any life insurance policy. With creditor protection, any value from the death benefit and any cash value to the policy are protected from any creditor attachment when the beneficiary election is adequately set up. This can be critical as estate claims from creditors can come out of the blue. Assets inside the estate can be exposed regardless of wording and drafting of the proper legal documents such as Wills.
The right insurance strategy put into place with a well-crafted estate plan can give certainty and clarity. Most importantly, a proper strategy can ensure that your wishes are fulfilled once you pass away and your assets end up where they are intended to go. This is the legacy of a well-drafted estate plan supported with the proper tools.
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