Why the Rich Must Make Life Insurance an Integral Part of Estate Planning

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Estate Planning Terms

Life insurance

Life insurance is a means of providing your family with financial protection when you die. This is very useful as it can cover for your mortgage, loans, etc. without your family having to be responsible for settling these debts.

Choosing a life insurance plan should be done with care and proper considerations in order to get the best possible deals that suit your need.

In order to know what life insurance will properly suit your need, you have to ask yourself certain questions and also provide answers to these questions. This will help you channel your plans properly. For instance, you should consider the current situation of your family, your age, your health status, your income status, etc. This is very important because, it will influence your decision greatly. Setting up an insurance policy without proper considerations of these things might make your insurance non effective.

Another aspect which you should give proper consideration to is your aims and goals. A proper evaluation of this will help you decide the right plan of insurance to set up. If you want to live a family life style were you will have a spouse and kids then you should consider an insurance plan which will provide readily available cash for your family when you die.

After considering these various factors, make sure the plan of insurance you want to opt for is suitable with your income and it is one you can afford easily.

Life insurance has numerous benefits; some of them are listed below

Availability of accessible cash

Wealthy people tend to have complicated estate. After the death of a person, his estate will go through the probate process –this could be avoided – which will determine the most recent and valid will of the deceased. The probate process could linger on for a long period of time. Most times it can persist for months and even weeks. One thing about this process is that while it is ongoing, the assets of the deceased will be out of reach of the family and heir. This could be a problem especially if their livelihood depends on this inheritance.

This is where a life insurance saves the day. During this time of delayed distribution of assets, the insurer could perform little paper work and in no time cash will be made available to the nominee. This will be of help pending the distribution of their inheritance.

Shield against liabilities

Before distributing the estate of a deceased person among his heirs, his creditors will be settled. These creditors are settled using resources from the estate of the deceased. At times this might leave the family of the deceased with no inheritance.

The married women property act of 1874

This act allows a married woman to protect her wealth from her relatives, her husband and even her creditor. If bought under this act, then life insurance plan is covered by the Married Women Property Act. For instance, a husband can set up his life insurance under the Married Women Property Act and name his wife and kids as beneficiaries. This means that when he dies, his life insurance will be protected by the Married Women Property Act against his creditors because his life insurance plan won’t be considered as part of his estate. Hence, his life insurance will be completely available to his wife and children for their up keep.

Wealth enhancement

Apart from the fact that a life insurance can make cash readily available to the deceased family, a life insurance plan can serve as a means of boosting one’s estate size and increasing their wealth. This of course will make available more wealth for the family. This increase could be used for philanthropic purposes like giving back to the community via the means of donating to orphanages, home of disabled people, etc.

It is very crucial for the rich to have a life insurance as it could be a plan –B or a backup plan when the time comes. And you should make proper analysis before setting a life insurance plan. In doing this, the guardians and assistance of a professional attorney is highly recommended. Our attorneys are always available for consult and hire.

DISCLAIMER: The information provided in this blog is for informational purposes only and should not be considered legal advice. The content of this blog may not reflect the most current legal developments. No attorney-client relationship is formed by reading this blog or contacting Morgan Legal Group.

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