A lot of people are first exposed to estate planning without ever setting out proactively to devise a plan. For many it all starts when they are given life insurance as one of the benefits when they embark on a career path. This can get you thinking about the future, and once your life begins to unfold as an adult and you start a family you will have loved ones who are depending on your income. At this time your life insurance coverage becomes all the more important, and with each addition to your family you’re going to have to reevaluate the level of coverage that you have.
There are those who procrastinate, looking at the odds and saying to themselves that it is highly unlikely that they will pass away anytime soon. Of course we would all like to live a long and fruitful life and be there for our families throughout, and most people do in fact live to see their children become self-supporting adults in their own right. There are however no guarantees and crystal balls are hard to find, so one of your responsibilities to your family is to be certain that you have adequate life insurance in place so that their standard of living will remain intact should the unthinkable happen.
In addition to its usefulness as an income replacement vehicle, life insurance plays a role in many estate plans for other reasons. Partners in small businesses who are engaged in succession planning often execute something called buy-sell agreements, and the purchase of life insurance is central to these agreements. Life insurance is also used to balance inheritances when you plan on giving a piece of property that comprises a large portion of your estate to one of your heirs. You may choose to purchase life insurance and make your other heirs beneficiaries in an effort to be fair to all.
This is a brief glance at life insurance as it applies to estate planning. To learn more, take a moment to arrange for a consultation with an experienced estate planning attorney.