A life insurance policy is a wise financial move for giving additional funds to your loved ones and allowing them liquidity during a time when other assets may be tied up in probate.
Buying a life insurance policy and storing it in a drawer is one option, but you’re not limited to that approach alone. You might decide to use a life insurance policy by placing it in a specific kind of trust. It’s very important to do this under the guidance of an experienced lawyer to address all the details.
Many different financial moves made in the years and months before retirement could benefit you, and one of these includes purchasing an irrevocable life insurance trust. This helps to decrease the overall value of your estate to minimize taxes paid on life insurance benefits that are given to your heirs after your death.
Remember that what you put into an irrevocable life insurance trust, however, is no longer legally yours, which means that you are unable to access it if you needed that money later on in retirement. However, fully funding an irrevocable life insurance trust, with no additional payments required for the rest of your life can give you some significant peace of mind that these benefits will be available tax free to your children when you pass away.
This can help you structure the remainder of your estate plan. An irrevocable life insurance trust is just one type of tool that can be used to minimize the size of your estate. Since there are many different types of trusts available, it is important to work with a talented estate planning lawyer in Pasadena. Our office can help you think about selecting a trust and the context of life insurance in your bigger estate plan.