Life insurance plays an important role in planning your estate. An insurance policy can be used to preserve the value of your estate, support dependents and ensure that there is enough money available to pay any outstanding debts, fees or taxes upon your death.
Estate liquidity is crucial to providing living expenses to surviving family members. One of the best benefits of life insurance is that it offers tax-free money to your beneficiaries.
There are a number of reasons why you may want a life insurance policy, including:
- To cover paying off taxes on your estate which you may owe on your death
- To cover paying off taxes on any illiquid assets you may have
- To cover funeral, lawyer and Executor expenses (including possible probate fees)
Taking Care of Your Dependents:
Many expenses can deplete an estate, chief among being them taxes. The benefits paid from a life insurance policy into an estate are not subject to income tax.
Why Life Insurance is so important to an Effective Estate Planning Strategy:
- A life insurance policy provides more in the way of liquidity
- It makes it easier to establish a trust fund
A life insurance policy also makes it easier to establish a trust fund for an individual or individuals whom you wish to support. You can designate a specific amount of money through the policy and even structure how and when the money will be dispersed.
FormalWill.ca is a leader in online estate planning. Our system has been developed in close consultation with Canadian lawyers to ensure accuracy. We have established a user-friendly online service which creates your legal documents instantly and is designed to save you money and time.
Are you ready to start the process of establishing a Life Insurance instantly? Click here to learn more.