The purpose of estate planning is to reduce and prepare for the uncertainties of settling the estate, as well to ensure the value of the estate by proactively managing taxes and expenses. A life insurance policy for seniors considering estate planning is a powerful tool in providing cash (liquidity) in the first phase of estate planning.

One of the main benefits of life insurance in estate planning is to provide cash to pay estate taxes when the bulk of the estate’s assets are illiquid. The sale of assets in an unfavorable environment (like trying to sell real estate now) can unnecessarily reduce the value of the estate, and leave your heirs with much less than you originally planned for.

Life Insurance can also assist in paying liabilities of estate testator and further acts as an emergency financial support in case illiquid properties are presented. Real estate inside of the estate may need repair, and property taxes and insurance will be due annually. Some of the assets may still have debt obligations against them. Cash can provide a relief valve to deal with these types of issues.

Life Insurance can also ‘equalize’ the assets to be transferred to a policyholder’s heirs.
Illiquid assets, such as real estate holding, family businesses, and collections of art, cars, antiques, baseball cards or wine, are very hard to distribute as an inheritance equally, since much of the value is sentimental. Life Insurance creates liquidity that can provide for a more fair distribution of assets to the heirs.

There are many types of life insurance that can help create liquidity within an estate. For more help in choosing the appropriate policy, please call a Puritan Life representative today!