Probate fees are based on the value of your estate and vary from state to state. Life insurance can provide the necessary funding for probate costs, burial and funeral expenses, estate administration costs (i.e., executor fees, valuation and appraisal fees) and any legal or accounting fees that may be incurred. Life insurance policy proceeds are paid directly to your beneficiary and do not form part of the assets of your estate for tax purposes. The liquidity and prompt availability of insurance proceeds are beneficial in covering the varied costs, fees and expenses associated with estate processing.
Creating Your Estate
- Life insurance can be an efficient way to create an estate or pass on wealth to next generations as more funds can be provided to heirs tax-free.
- Another common use for life insurance is to facilitate equal distribution to beneficiaries.
- An example would be an estate that includes shares of a business to be distributed among family members who are active in the business. Finally, often, the business represents the major asset of the estate.
References:
Insurance, O. (2012). The role of life insurance in estate planning. Retrieved September 03, 2020, from https://www.omainsurance.com/Articles/Pages/The-role-of-life-insurance-in-estate-planning.aspx