When you get your first real job you are probably going to be introduced to the basic foundation of estate planning in the form of life insurance. If you are married at that time you will immediately recognize its value as a vehicle of income replacement that would enable your spouse to weather the storm should you pass away unexpectedly.
As your family grows your financial responsibilities will inevitably grow as well. For this reason it is important to keep track of your life insurance coverage and be ready to increase it as this becomes necessary.
Most people are well aware of the use of life insurance as an income replacement vehicle but it has other uses in estate planning as well. Life insurance is utilized when small business partners enter into buy-sell agreements as a succession planning tool. To explain briefly, the partners take out life insurance policies on one another and the proceeds are used to buy the share that was owned by a deceased partner from his or her family.
Life insurance is also used to balance inheritances. If you want to give a very valuable asset that is not liquid to one heir you could make another heir the beneficiary of an insurance policy that has a similar value to balance things out.
Estate planning involves the utilization of many different tools and life insurance is one of them. If you would like to sit down and discuss a comprehensive plan for the future with an expert, take a moment to pick up the phone and arrange for a consultation with a good Morris County NJ estate planning lawyer.