One of the estate planning tools that is most frequently utilized is life insurance, and for many people the purchase of life insurance is the initial step taken into the realm of estate planning. You may be one of the many who is first exposed to life insurance as a component of your benefits package at work, and a lot of people who are first starting out are unmarried and without children.
At this point in your life the life insurance coverage is a way to cover your final expenses and pass a little something along to your loved ones should the unthinkable take place. And after all, basic coverage is usually going to be paid for by the company so anything that is free is welcome.
As you progress through life you may well get married, and when someone else is depending on your income, life insurance takes on added significance. When children come along you’re going to have to revisit your coverage to make sure that they are provided for, and it would be prudent to think long-term when you’re making financial projections with regard to their needs. Nobody likes to think that their marriage will come to a close, but divorces are another life-changing event that precipitates a review of your insurance coverage.
In addition to serving as a vehicle of income replacement, life insurance has other uses in the field of estate planning. There are those who have the lion’s share of their assets concentrated in a single piece of property such as a business or some real property. You may want to leave this property in its entirety to one of your heirs for one reason or another. To be fair to all you may take out life insurance policies making the other heirs your beneficiaries, with the value of the policies being similar to the value of the property in question.
If you would like to probe deeper into the subject of life insurance and how it can fit into part of your estate plan, simply get in touch with an experienced estate planning attorney to arrange for an in-depth consultation.
Mr. Nirenstein is licensed to practice before the courts of the State of Connecticut and the United States District Court. He is a member of the Connecticut and Hartford County Bar Associations, and the Estate and Probate, Elder Law, Business Law and Real Estate Sections of the Connecticut Bar Association.
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