The future can come quickly. We live our life day by day, taking advantage of the here and now, but it’s important to also plan for the future. Estate planning is one way to provide peace of mind and ensure that your wishes are fulfilled after you pass away. In particular, life insurance plays an important role in estate planning.
Life insurance is a type of contract between an insurer and an insured. The policyholder pays a regular premium in exchange for coverage that pays out a death benefit upon the passing of the insured individual. This money can be used to help pay off any debts or to provide income replacement for loved ones left behind.
When it comes time to plan your estate, having life insurance as part of your strategy is essential in providing peace of mind and helping protect your loved ones. Life insurance helps ensure that everything you have worked hard for throughout your lifetime will be taken care of and passed on according to your wishes. For Orlando residents looking to make sure their legacies will last long after they are gone, incorporating life insurance into their estate plans is one way they can do just that. Our law firm is here to help. Call us today at 407-743-6059 to get started.
Is Life Insurance Considered an Asset in an Estate?
Life insurance is an essential part of many people’s financial planning. It provides a large lump sum to help loved ones in the event of the insured person’s death. But what happens to life insurance when it comes time to settle an estate?
The answer depends on the type of policy. Life insurance policies are considered assets of an estate and are subject to probate if there isn’t a listed beneficiary outside of the deceased policyholder. This means that the money due to be paid out through a life insurance policy may be subject to estate taxes. On the other hand, if there is a listed beneficiary on the life insurance policy, the proceeds are generally paid directly to them without being subject to probate.
It is important to remember that life insurance policies without beneficiaries, like all other assets, are part of the estate and may be divided among heirs according to the decedent’s wishes or as directed by a will. If there is no will, state law dictates how the assets of an estate should be distributed.
When it comes time to settle an estate, it is essential to make sure all life insurance policies are taken into consideration. Doing so can help ensure that loved ones receive their intended inheritance and avoid any unnecessary taxes and fees. Having a lawyer examine the ins and outs of your life insurance policy as it relates to your estate plan is key to protecting yourself in the future.
Does a Life Insurance Policy Overrule a Will When It Comes to a Beneficiary Receiving an Inheritance?
When it comes to receiving an inheritance, life insurance policies often take precedence over any wills that have been written. This is because life insurance policies are considered contracts between the policyholder and the insurance company or carrier. The beneficiary of the policy is typically named by the policyholder in a contract with the carrier and therefore does not need to be mentioned in a will. This means that even if a will mentions another beneficiary should receive payment from the life insurance payout, only the beneficiary or beneficiaries listed in the life insurance policy are entitled to the money.
It is important to understand, however, that when multiple beneficiaries are listed on a life insurance policy, the will may still have some influence on how those benefits are distributed. In order to ensure that your wishes for the distribution of any life insurance proceeds are carried out, it’s important to review your estate plan with a skilled Orlando estate planning lawyer and make sure everything lines up correctly.
Why is it Smart to Plan for the Future with a Lawyer?
Life insurance is an important part of any sound financial plan. It helps protect your loved ones by providing them with the financial resources they need in the event of your untimely death. But before you purchase life insurance, it’s best to consult with a lawyer who can advise you on how to structure your policy so that it suits your particular needs and objectives.
One of the key benefits of life insurance is that funds are not subject to probate court costs or state inheritance taxes, meaning more money goes directly into the hands of those who will need it most. Estate planning lawyers can provide guidance on complex tax and structuring issues, as well as help you craft a unique estate plan that takes into account your wishes for the distribution of life insurance proceeds. At the Law Office of Erin Morse, we have extensive knowledge of what type of policy best suits an individual’s needs and how each piece of an estate plan connects with each other.
On top of helping you navigate through life insurance questions, we provide comprehensive estate planning services, including creating and updating your will, setting up a living trust or revocable living trust, and more. At the Law Office of Erin Morse, our experienced team of lawyers can help you properly plan for the future with life insurance and other financial instruments. Contact us today at 407-743-6059, so we can get started on giving you peace of mind about your future!