Description
Could you use life
insurance more creatively?
hen they think of life insurance, most
people only envision a financial product that will provide income for their
loved ones when they die. But this coverage can
actually help dealers accomplish a wide range of
financial objectives.
W
Different applications
Here are some creative uses of life insurance that
go beyond income replacement for your family
after you die:
As a key component of your business succession
plan. Many dealers use a buy-sell agreement to
help ensure the smooth transfer of the business
to a successor should they die unexpectedly or
become disabled. And life insurance is often used
to fund the agreement.
Here’s how it works: You appoint a successor —
often a family member or key employee — who
buys a cash value life insurance policy that pays
out upon your death or permanent disability.
Your successor then uses the proceeds to buy the
dealership at a predetermined value.
Your heirs, meanwhile, would receive the remainder of the proceeds to meet their ongoing living expenses. while you’re alive. When you die, whatever assets are left in the CRT would go to the charity. But what about your family? This is where the life insurance comes in: If you buy a life insurance policy with the income from the CRT, your family will receive the policy’s death benefit when you die. This way, you’re providing for your family and giving to charity at the same time. As a way for your heirs to pay estate taxes. This can be accomplished using an irrevocable life insurance trust (ILIT).
You would set up an ILIT outside of your estate and make annual gifts to it. The trust would then buy a life insurance policy with your heirs as the beneficiaries. Your heirs, in turn, could use these proceeds to pay any estate taxes and other expenses due upon your death. As part of your charitable giving and estate planning efforts.
Using life insurance may enable you to accomplish both charitable giving and estate planning goals using a charitable remainder trust (CRT). A variety of options Instead of giving assets directly to a charity, you would place them in the CRT. You would receive a deduction for the charitable contribution as well as income generated by the assets in the CRT Although less popular as a savings tool in recent years, life insurance still presents dealers with a variety of intriguing options. Consult your financial advisor about whether these strategies would be applicable to your situation.
â° This publication is distributed with the understanding that the author, publisher and distributor are not rendering legal, accounting or other professional advice or opinions on specific facts or matters, and, accordingly, assume no liability whatsoever in connection with its use. ©2016 DLRma16 7 .
Your heirs, meanwhile, would receive the remainder of the proceeds to meet their ongoing living expenses. while you’re alive. When you die, whatever assets are left in the CRT would go to the charity. But what about your family? This is where the life insurance comes in: If you buy a life insurance policy with the income from the CRT, your family will receive the policy’s death benefit when you die. This way, you’re providing for your family and giving to charity at the same time. As a way for your heirs to pay estate taxes. This can be accomplished using an irrevocable life insurance trust (ILIT).
You would set up an ILIT outside of your estate and make annual gifts to it. The trust would then buy a life insurance policy with your heirs as the beneficiaries. Your heirs, in turn, could use these proceeds to pay any estate taxes and other expenses due upon your death. As part of your charitable giving and estate planning efforts.
Using life insurance may enable you to accomplish both charitable giving and estate planning goals using a charitable remainder trust (CRT). A variety of options Instead of giving assets directly to a charity, you would place them in the CRT. You would receive a deduction for the charitable contribution as well as income generated by the assets in the CRT Although less popular as a savings tool in recent years, life insurance still presents dealers with a variety of intriguing options. Consult your financial advisor about whether these strategies would be applicable to your situation.
â° This publication is distributed with the understanding that the author, publisher and distributor are not rendering legal, accounting or other professional advice or opinions on specific facts or matters, and, accordingly, assume no liability whatsoever in connection with its use. ©2016 DLRma16 7 .
