It is important to plan for what might happen to your estate, especially for the generations to come. If you want to pass down your estates to family members or leave behind money to make sure they are secure with their endeavors, you need to plan out the inevitable.
There are many things to keep in mind while planning for your estate legacy as there are too many changeable and unpredictable factors such as estate taxes, family relations, etc.
Please keep reading to find out the three ways that you can expect the unexpected and plan accordingly. We are going to provide more information on tax protection, options for money flexibility, and a solution for the unexpected.
Tax Protection
The reason that people have life insurance is that if something were to happen to them unexpectedly there would be a life insurance payout to protect their assets. There are also other benefits to having life insurance.
For example, if a high-net-worth married couple wanted to get life insurance based on the trustee’s influence to buy and hold that policy in trust, then they could.
They would essentially be signing up for an irrevocable life insurance trust. Some other things that this particular trust can provide are tax-free gifts and proper drafting, which would be excluded from your total taxable estate.
Within this policy, the trustee would also be able to use the death benefit to pay taxes and settle any other estate costs. This policy, like many others, also allows you to pick specific beneficiaries if something were to happen to you.
Options for Money Flexibility
If there is a couple that is looking for a more flexible plan to choose from there is the flexible irrevocable life insurance trust. This trust is run where one couple is the grantor and the other one is the beneficiary. Within this trust, the trustee will be granted discretion to make distributions to the beneficiary as needed.
The trustee can be a friend or extended family member. There are ways to change the language in the contract based on the spouse’s worries that he or she will lose direct contact with the trust. If divorced, the language will already include ‘my current spouse’ which will indicate the marriage that the person is in at the time.
There are more features that the flexible trust can provide like the trustee being allowed to make loans to the grantor and can access any available cash that is necessary. This is a beneficial feature in case the beneficiary were to pass away first.
Solutions for the Unexpected
In the end, whether you are looking to add a Canada Protection Plan to your estate or prepare for the unseen future, it is important to have a life insurance plan ready. Having added protection on your estate and a flexible estate trust could be something of major benefit for you and your family.