Protecting Family Against Untimely Death
Life doesn’t always go according to plan, so it's important to have a contingency plan in place to protect your family in the event you pass away unexpectedly.
Potential Direct Financial Impact
- Costs associated with securing sufficient life insurance coverage and ongoing premiums.
- Legal fees associated with setting up estate planning documents and/or crafting a buy sell agreement funded with life insurance if you own a business.
- Contributions to savings to protect your family from the unexpected.
- (In the event of your passing) Lump sum payout from any existing life insurance policies to cover your family’s immediate and ongoing expenses
- (In the event of your passing) Final expenses to cover estate costs and funeral arrangements
- (In the event of your passing) Transfer of your assets according to your wishes outlined in your will if in place.
Potential Secondary Impacts
- Short and long-term lifestyle impact on your family if you passed away with insufficient life insurance.
- Potential need to sell the family home in the event they are not able to afford their current lifestyle without your income and/or insurance payout.
- Potential need for your spouse to return to work (if applicable) in order to meet financial obligations if you do not have sufficient coverage.
- Potential disruption to your children’s schooling and/or child care if you do not have sufficient coverage.
- Potential impact on your family’s ability to fund future goals like education and retirement.
Self Completion/Execution Risks
- Not having sufficient life insurance coverage in place to cover your family’s immediate and ongoing expense needs.
- Not having a will in place that outlines a legal guardian for your children and/or your wishes for the distribution of your assets.
- Not setting up a buy-sell agreement funded with life insurance if you own a business.
- Not having a plan to pay off any unforgivable debt with life insurance.
Situations where expertise adds the most value
- Tax Adviser
Working with a tax adviser can help ensure that you not only understand how to take advantage of the annual gift tax exclusion and file the IRS tax forms to track gifting under the lifetime exclusion, but also identify the types of assets and accounts that are best suited to transfer as part of your estate.
- Legal Adviser
Depending on the complexity of your situation and the value of your estate relative to the estate tax exclusion, working with a trust and estates attorney can pay dividends. It is highly recommended that you set up a trust if you meet any of the following circumstances: have children from a former marriage, have a special needs child, your spouse is not a US citizen, and/or you have assets (or a business) with a low cost-basis that are likely to appreciate significantly over time that you plan to gift or transfer upon your death. Additionally, if you own a business with a partner or have a protege that may want to buy the business if you passed, look into structuring a buy-sell agreement and fund it with life insurance.
- Financial Adviser
As your life evolves, it is critical to reassess your financial goals, estate planning needs and insurance coverage. The best way to identify any gaps in your plan and cover your bases is to work with a financial adviser who can look at all of the pieces of your financial picture holistically.
- Tax Adviser