Elder law is often focused on handling health issues and protecting the assets you’ve earned while you are still alive. Ensuring your savings aren’t wiped out by a nursing home stay and that someone is ready to make health decisions if you are incapacitated is crucial but you also need to prepare for how your family will eventually move forward without you. That’s where a life insurance policy can play a role in your overall estate plan.
Types of Life Insurance and How to Use Them for Estate Planning
The bottom line is that you need a plan in place so your family is provided for during an inevitably difficult time. You don’t want your loved ones to worry about paying bills or losing treasured assets while grieving your loss. That's why you should talk to a lawyer before deciding on the right kind of life insurance. There are two main types to know about:
- Term. This type of policy is usually less expensive, especially for people who are younger or healthier, but it only covers a set period of years.
- Permanent. These policies remain usable for the duration of your life and may accrue extra value or include the option to borrow against the eventual payout, but they also typically cost more.
An attorney can help go over your financial situation and find the best option for your unique situation. Once chosen, life insurance policies are useful in estate planning for:
- Avoiding probate. Funds are distributed to your family more quickly with a life insurance payout, and those funds avoid tax.
- Business succession planning. Life insurance is particularly useful if you are trying to keep a business run by the family.
- Covering costs. Funeral expenses, taxes, and other bills that need to be paid can be covered by your policy, in addition to providing for your heirs in the long term.
Go Over Your Life Insurance Options With a Skilled Attorney
Keep in mind that a life insurance policy may still need to be used in connection with other estate planning tools, like an irrevocable trust, to provide peace of mind that everything will go where you intend. Talk to an attorney to go over the options. Don’t wait to ensure your family is provided for in the event of a catastrophe. Contact our office to set up a consultation and protect your family’s financial future.