Effective estate planning takes more than a will. It’s a comprehensive process that looks ahead and plans for numerous different situations that can occur both before and after the end of your life.
Insurance policies of various sorts can play an important role in securing your future goals, both for yourself and your beneficiaries and heirs. Here are three ways insurance can factor into your estate plans:
1. Replacing lost income to your family
If you have a young family and you’re the major breadwinner, what happens to your loved ones if you die? Life insurance acts a sort of income replacement tool, ensuring that your dependents have the financial resources they need to maintain their standard of living after your death. Handled correctly, life insurance adds liquidity to your estate, meaning that your beneficiaries can access those funds without the delays caused by probate.
2. Long-term care planning
Some disability and long-term care insurance plans can be incorporated into your estate plans. These policies can provide financial support when you have a prolonged illness or disability, so that your health care needs don’t deplete your estate and destroy your legacy.
3. Equalizing inheritances
It can be hard to divide up an estate fairly when some of it involves real property. Life insurance can provide the funds to equalize inheritances for beneficiaries when there are real assets that cannot easily be divided. This can help maintain family harmony and relationships after you are gone.
Estate planning is not a Do-It-Yourself project. When you don’t have the right legal assistance, it is too easy to make mistakes. Integrating insurance into your estate plan can contribute to a more resilient strategy for the future, helping see that your legacy is preserved and your loved ones are financially secure in the face of uncertainties.