Life insurance ensures your loved ones have cash funds immediately available. Often, the passing of a family member comes with unexpected expenses. Many Americans have investments such as real estate or retirement accounts like 401(k)s. However, these types of assets are not liquid.
At first glance, life insurance may not seem related to the distribution of money and property in your estate plan. However, it can be an integral and important part of a well-drafted estate plan. In addition to providing a sizeable sum of money to your heirs, a life insurance policy offers other benefits.
One of the more popular estate planning strategies that fit many situations is an irrevocable life insurance trust (ILIT).
An ILIT can hold a life insurance policy outside the insured person's estate. This ensures that the proceeds are not subject to estate taxes. So, the policy helps provide financial security for your loved ones without being part of the taxable estate.
Find out all the benefits of life insurance relating to your estate plan.