Over the years, life insurance has played a vital role in estate planning relative to either paying off or avoiding estate taxes. People create life insurance to achieve various goals, and this is exactly what we would be covering—wondering how you can achieve your estate planning goals using life insurance? Read on.
Income Taxes
According to the recent passage of the Secure Act, beneficiaries, who inherit IRAs, are required to make withdrawals from these accounts over the following years. Unlike earlier policy, when the beneficiary could make withdrawals for the rest of their life, it is now limited to 10-year duration.
Now IRAs are much larger, leading to higher taxes for the beneficiaries to pay. In this case, you can use life insurance to avoid the problem presented by income taxes.
Long-Term Care Costs
Long-term care insurance is an effective way to aid long-term care needs. Not only your assets but life insurance would also protect you against long-term care costs. Usually, people face substantial taxes from IRAs, but long-term care insurance can provide for the care costs at a relatively lower tax rate.
Blended Families
Blended families have to face a lot of issues when it comes to establishing an estate plan. Apart from the conflicts that arise during asset distribution, another challenge is to make sure that all of the intended beneficiaries receive their due share from the inheritance. In this situation, life insurance is always a good idea to consider in resolving estate planning challenges.
Contact an Experienced Estate Planning Attorney
If you want further information or any help regarding life insurance, contact us right away. At Keystone Asset Protection and Estate Planning, we would be more than delighted to provide our services so that you can protect your assets and preserve your hard work.