A surprisingly high number of people are going through life without an estate plan, and of course the younger you are the more likely it is that you will be without a will or any other estate planning documents.
However, it is important to remember that you plan your estate for the benefit of the people that you love. So when you procrastinate or simply shirk your responsibility to create a plan it is your family members who are being placed into harm’s way.
One of the simple things that you can do for the protection of your loved ones even as a young adult is to make sure that your life insurance coverage is adequate. Life insurance is a very efficient and affordable income replacement vehicle and it can make all the difference if you were to pass away unexpectedly.
The above is something that most people understand, but life insurance is used in estate planning in other ways as well. Inheritance balancing is one of them.
Let’s say that you own a business and you have a son and a daughter. For the purposes of this example your son has worked in the business all of his life, and the business represents your most significant financial asset. You want to leave the business to your son after you pass away.
Your daughter has never worked in the business and is really not interested in it at all. How do you make sure that both of your children are provided for equally?
One way of doing this would be to make your daughter the beneficiary of a life insurance policy equal to the value of the business that you are leaving your son.
This is just one example but there are other uses for life insurance as well. To learn more, simply take a moment to arrange for a consultation with a good Cleveland OH estate planning lawyer.