Asset Management

Insurance Planning

Life Insurance Strategies

Life insurance typically plays three important roles in estate planning:

The insurance provides a death benefit to the insured’s beneficiaries which gives financial support, stability, and potentially equalization of asset distribution after the passing of a loved one.
The proceeds provide liquidity for funeral, burial, and estate settlement expenses.
Lastly, it can provide funds for estate taxes due.
With Massachusetts estate taxes due for any estate worth $1,000,000 or more, it may make sense to use an irrevocable life insurance trust (ILIT). With an ILIT, you transfer the policy to the trust or you can use the trust to purchase the life insurance policy. In this arrangement, the trust owns the policy and not the insured. The ILIT removes the life insurance policy from the estate and thus the death benefit as well. This strategy can be instrumental in reducing or eliminating the estate tax due.

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