Minimize Taxation of Assets
Death and taxes are two certainties of life. An estate plan that incorporates life insurance can help minimize or eliminate taxation, increase asset protection, and preserve more of your wealth for your family and charity.
Protect Your Family by Creating Liquidity
An unexpected death can financially devastate an entire family, especially if it occurs to the primary breadwinner. Who will pay the mortgage, take care of the medical bills, or send the kids to college? Life insurance provides an income tax-free cash death benefit to your surviving spouse, children, and other named beneficiaries so they can fund these important needs if you are no longer there to provide for them.
Preserve Family Harmony After You Are Gone
Beneficiaries almost inevitably fight over inherited assets when the founder is no longer there to intervene. You can avoid this outcome with a written estate plan and life insurance, because:
Estate planning instructions will dictate “who gets what and when” to eliminate any confusion as to your intent and to discourage protracted disagreements.
Life insurance leverages the premium dollars paid into an income tax-free cash death benefit that your beneficiaries can use to equalize their inheritances, especially if your estate is illiquid (real estate, family business, etc.).
Real Examples – Lasting Results
Treating Children Fairly While Preserving the Family Business
A couple in Chicago was concerned about how to treat their two children fairly after their passing, while perpetuating the illiquid commercial real estate business they worked so hard to build. The business had grown over the years to 35 employees, including their son who was serving as CFO after 20 years of service. They also have a daughter married with three kids, out of state and not part of the business. It was important to them to treat each child equally, but they were concerned about what would happen to the real estate portfolio if it had to be split. Also about the potential of disagreements among their two children.
In collaboration with their attorney, a life insurance policy was properly designed to provide the immediate cash needed to equalize the heirs’ inheritances – eliminating the risk of having to sell or encumber the inherited real estate portfolio. It also fit hand-in-glove with the company’s established legal framework and could be used to help mitigate potential estate tax liability. The client is thrilled to preserve their commercial real estate portfolio for the next generation and protect the relations between their children.
Protect the Family While the Business is Still Growing
An accountant in her 40’s opened an independent practice and was in the early stages of building her client base. Income was limited until her practice gained momentum. As a start-up, the business had little value and nobody to take over operations. On the table, was substantial financial risk to her family. With a spouse and two children, it was important to have protection against “the unexpected”. An affordable permanent insurance policy was designed that included important benefits like: a lasting death benefit to her family, accessible cash value growth for emergencies or as needed, and a long-term care benefit to assist with potential healthcare needs. Peace of mind with protection – the entire family feels much more confident and supported.
“I met Cory Grant back in 1998 when my parents were beginning a transition of the family business and associated real estate. He first reviewed our life insurance coverage and found less expensive, more suitable coverage with a high quality carrier and then worked with us to design an overall succession and expansion plan. His firm now works with three generations of our family.”
Don McDougal, Owner, Grand Tradition Resort, Fallbrook, CA