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North Carolina and Kentucky Estate Planning Attorneys

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Florence Estate Planning Lawyer Discusses Incorporating Life Insurance into Your Plan

September 18, 2017 by John Potter

Florence estate planning lawyersThese days a lot of families need two incomes to make ends meet so it is important to consider where your family would be if one of those incomes were to suddenly disappear. A lot of people think that estate planning is only relevant to older Americans; but in some ways, it is more important for younger adults. More people may be directly relying on them for the money they bring in regularly. Life insurance is crucial for income replacement for most people. As a result, our Florence estate planning lawyer recommends using life insurance policies as part of your comprehensive estate plan.

Some benefits of including life insurance in estate planning

Life insurance serves other purposes in estate planning as well. For example, it can be used to balance inheritances. Let’s say that your daughter has worked in the family business all of her life and the business represents a significant percentage of your estate. You may want to leave your business to your daughter, but then you would not have sufficient other assets to give your son an inheritance.

One solution is to take out a life insurance policy equal to the value of the business and make your son the beneficiary, balancing the inheritances. To learn how to make life insurance part of a comprehensive estate plan, simply pick up the phone to arrange for a consultation with a good northern Kentucky estate planning lawyer.

Life insurance may play a significant role in your estate plan for any number of reasons, but it is important to understand that life insurance proceeds may be subject to the estate tax if they are conveyed directly to a beneficiary.

How an irrevocable life insurance trust can help

This potential taxation can be avoided through irrevocable life insurance trusts. If you arrange for the life insurance policies to be the property of the trust rather than your personal property. But you name trust beneficiaries, and if you are married, your beneficiary would presumably be your spouse.

When you pass away the insurance policy proceeds would be owned by the trust rather than your surviving spouse so they would not be taxed your estate or your spouse’s estate, but your spouse could still benefit from the trust. And once your spouse passes away, the remaining assets will go to your secondary beneficiaries (your children) without estate tax. This is why our Florence estate planning lawyer sometimes recommends this type of trust.

Irrevocable life insurance trusts

A well-constructed ILIT can indeed preserve wealth. If you’re interested in including an ILIT in your overall estate plan, don’t hesitate to take action and make an appointment to speak with our licensed and experienced Florence estate planning lawyer.

Benefits of an Irrevocable Trust

An irrevocable trust can have other benefits as well – and some of them mirror those of the revocable trust variety. For example, an irrevocable trust keeps trust assets out of probate and preserves privacy. It also provides a reliable mechanism for transferring assets when you die. It does not, however, provide you with the ability to control those assets. Once you relinquish ownership, you give up control and cannot reclaim them by dissolving the trust.

Since the assets are beyond your reach and no longer part of your estate, creditors cannot gain access to them in lawsuits. If you need to apply for Medicaid benefits for nursing home care in the future, the assets in a well-drafted irrevocable trust won’t be counted when your eligibility is calculated. If you have questions about any of these issues ask our Florence estate planning lawyer.

If you have questions regarding irrevocable life insurance trusts or other estate planning matters, please contact the experienced attorneys at The Potter Law Firm for a consultation. You can contact us either online or by calling us at (606) 324-5516 (Ashland, KY) or (859) 372-6655 (Florence, KY), or for individuals in the Charlotte, NC area at (704) 944-3245.

  • About
  • Latest Posts

John Potter

Latest posts by John Potter (see all)

  • What Happens If I Leave Assets Out of My Living Trust? - February 15, 2019
  • What are the Advantages of an Irrevocable Trust? - February 14, 2019
  • Charlotte Medicaid Attorneys Explain How to Protect Healthy Spouses - February 11, 2019

Filed Under: Estate Planning

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John Potter has been a real pleasure to work with. He is very knowledgeable and explains things in a very simplistic manner so the average person can understand how/why the laws are written. He is very attentive and asks questions in such a way that not only helps him understand your goals, but also helps you think about what type of goals and expectations you should be considering. Exemplary client service.
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My husband and I selected Ms. Potter to assist with our small business. She responsive and attentive every time I have a question or need assistance, and is extremely knowledgeable and able to answer any legal question I have had. I know I can count on Ms. Potter for all of my business legal needs and I would highly recommend her to anyone needing legal assistance with such.
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Overall The Potter Firm was very professional. They took what could of been a very complicated process and were able to break it down so it was a lot easier to understand. We are confident we now have made the right decisions in our estate planning. Good firm to work with.
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ASHLAND
1620 Carter Avenue
Ashland, KY 41101-7631
Phone: (606) 324-5516
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15720 Brixham Hill Avenue
Suite 300,
Charlotte, NC 28277
Phone: (704) 944-3245

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11330 Vanstory Drive
Huntersville, NC 28078
Phone: (704) 944-3245

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NORTHERN KENTUCKY
7310 Turfway Road
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Florence, KY 41042
Phone: (859) 372-6655

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