When estate planning, you may understand the most basic options, such as creating a Will or Trust. However, there are many different options you can invest in to care for your loved ones upon your passing. One option many may not have considered is utilizing their Life Insurance policy when estate planning. If you have not explored the benefits of this option, you’ll want to keep reading. The following blog explores the benefits and how a Medina, Ohio estate planning lawyer can assist you through these challenging times.
What Are the Benefits of Using Life Insurance in My Estate Plan?
Using your Life Insurance in your estate plan can provide many benefits for your loved ones, as it allows you extra funds to help care for your loved ones. This makes it easier for your loved ones to make arrangements following your passing.
Generally, you will select either term or universal Life Insurance. Term Life Insurance operates on an annual basis and functions similarly to auto insurance. You will pay for protection with no cash accumulation. However, your Beneficiaries will receive funds upon your passing, which is the policy’s face value.
Universal Life Insurance is the more familiar option for many. This option is much more expensive as it also operates as a savings plan since cash will accumulate. When the policy owner passes away, the payout will be much larger than that of Term Life Insurance.
How Can I Utilize This Asset When Estate Planning in Ohio?
There are many ways you can utilize your Life Insurance policy when planning your estate.
If you are the head of your household and you have dependants that rely on you for your income, your Life Insurance policy can act as income replacement. However, depending on the policy, your plan may only be able to serve as coverage for medical or other unexpected expenses. Regardless, this can help care for your loved ones upon your passing.
Another option is to use your policy as asset equalization. Because some assets may have multiple benefits, you may find that using your Life Insurance can help make this distribution of assets more fair. For example, if you want to leave one child your vacation home while the other will receive a number of valuable assets, you can leave the child receiving the smaller, sentimental assets a portion of your policy to bring their inheritance to the same value as their sibling.
As you can see, there are many benefits to utilizing this asset when planning for the future. However, putting your plans into action can be confusing if you are unfamiliar with the estate planning process. As such, it’s essential to enlist the assistance of an experienced estate planning attorney to help guide you through the complexities of this process. At Krause Law, our dedicated legal team will do everything possible to help you achieve peace of mind for the future. Contact us today to get started.