Legacy

As wealth increases, so does the need to protect assets.  Whether it’s to cover estate taxes, create multi-generational wealth, facilitate the smooth transfer of a business, or to leave an asset behind to charity, a life insurance policy that provides liquidity upon death is wise and prudent to include in a legacy plan.

When designing a comprehensive estate plan, more than just the value of the overall estate must be considered. More importantly, proper planning should be centered around the make up of the assets inside the estate. For example, if the majority of an individual’s investments are in real estate, proper legacy planning will facilitate the transfer of these illiquid assets without beneficiaries being forced to liquidate them to pay  taxes owed. The liquidity of an estate is frequently overlooked, forcing beneficiaries to sell inherited assets with substantial value in order to pay the taxes owed.

If an individual has a large interest in a company, it must also be considered whether beneficiaries would prefer inheriting interest in a company or a windfall of liquid cash. Frequently, business disruptions occur on the transferring of business interest to a beneficiary due to either lack of interest in ownership, or business partners not having the capital to purchase the outstanding interest. A properly structured legacy plan is an efficient way to provide an immediate windfall of tax-free liquid money and effective way to avoid being forced to liquidate other assets and business disruptions due to lack of capital.