life insurance

How Life Insurance can Help After a Divorce

A large number of marriages do not last. Not only is the ensuing divorce process emotionally challenging, but it also introduces many stressful challenges. One often overlooked complication that many people must navigate during this time involves estate planning. One particularly helpful strategy that can be utilized during this time is obtaining life insurance. The following will take a brief look at some of the benefits that people realize through the use of life insurance during this difficult time. Provide Funds for the Divorce Process If a divorce involves hostile partners or includes child custody issues, the process can take an extended time. During this time, it is common to incur several fees. If you have an established life insurance policy, it is possible to take withdrawals or loans from the policy’s cash value to pay for these expenses. If the policy is designed effectively, clients will not be required to liquidate other assets or pull money from an estate that would have been passed on to beneficiaries.  Protect Your Income After a Divorce It is common to discover that your income substantially changes after a divorce. To help the lower-earning spouse transition to life after divorce, courts award alimony     Read More

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How to Make the Most of Life Insurance Policies and Trusts

There are a number of estate planning funding sources. For example, death benefits received from a life insurance policy can often be considerable. These benefits can then either be paid directly to beneficiaries or can be placed in a trust and distributed to a beneficiary at a later date.  The following will review some of the reasons to consider funding a trust with benefits from a life insurance policy.  Using Trusts for Benefits is More Advantageous Some people decide to name an individual and an alternative to receive benefits from a life insurance policy, but it is often a wiser idea to name a trust as a beneficiary.  In many cases, there are limitations placed on naming a secondary alternative death beneficiary who receives benefits if the first named party does not survive the policy holder. Instead, placing life insurance benefits in a trust that contains instructions for a trustee on how the amount should be distributed is often a much more preferable option.  This is because trusts can be drafted in such a way to protect a beneficiary who would spend assets unwisely if they directly received them. Furthermore, trusts can also be used to protect assets from creditors.      Read More

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Life Insurance Benefits

The reason why many decide to purchase life insurance is that it often helps them reach their financial goals. In some cases, life insurance can even provide individuals with benefits while they are still alive. Selecting the proper type of life insurance, however, can be challenging. Fortunately, an experienced estate planning attorney can help you obtain the best possible life insurance for your situation. This article will discuss some of the advantages (as well as disadvantages) involved with life insurance in an estate planning context. The Benefits of Life Insurance Life insurance offers some unique benefits, which include the following: After a person’s death, compensation from life insurance policies helps provide survivors with financial security. In comparison to other types of accounts like Roth IRAs, life insurance policies are not as restricted by tax requirements. This means that compensation administered after a person’s death is often tax-free. Another tax advantage provided by life insurance policies is that the value of the benefits grows at a tax-deferred rate while the insured is alive. Life insurance policies also offer the tax advantage that cash withdrawals up to the total of the life insurance policy can be made free of income tax. If     Read More

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Common Mistakes in Picking Life Insurance Beneficiaries

Appointing a person to handle money from a life insurance policy often only involves one decision, but this selection is one of the most difficult choices that many people must make. It is common for individuals to make errors, however, when making estate plans, which can result in life-changing mistakes. The following will review some of the most common mistakes that people make when deciding on whom to name as a life insurance beneficiary. Mistake # 1: Failure to Update Your Policy It is critical that people with insurance policies realize that these documents should not be abandoned or forgotten about after being written. Instead, a person should make sure to update a life insurance policy after every major life events including deaths and marriage. Not only is it possible that a person’s perspective on an individual might change, these events can also change how individuals can inherit amounts. Instead, the best advice is for a person is to always make sure that beneficiary choices are kept updated. Mistake # 2: Forgetting Primary Beneficiaries Some people decide on a suitable life insurance beneficiary, but fail to appoint an alternate person to act as a beneficiary. As a result, if something     Read More

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