Transfer wealth efficiently and cover estate costs
For families with significant assets, life insurance is a precise estate-planning tool. It creates tax-efficient liquidity to cover estate settlement costs and taxes, equalizes inheritances, and passes wealth to the next generation.
Estates can owe taxes and settlement costs soon after death, but much of the wealth may be tied up in a home, a business, or investments. A life insurance benefit provides tax-free cash exactly when it’s needed, so heirs don’t have to sell assets at a bad time.
Holding a policy inside an irrevocable life insurance trust (ILIT) can keep the benefit out of your taxable estate. Survivorship (second-to-die) policies are popular here because they pay after both spouses pass — precisely when estate taxes come due. These strategies should be coordinated with an estate attorney and tax advisor, and we’ll work alongside them.
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In most cases the death benefit is income-tax-free to beneficiaries. Estate taxes can apply depending on how the policy is owned and the size of the estate — which is exactly why ownership structure and trusts matter.