Thinking about what to include in your will, how you can use various types of trusts, and what medical directives you want to include in your estate plan are all very important, but you shouldn’t forget about the role insurance plays as well. Many people will use insurance as a key part of their estate and inheritance plans. Not only will medical insurance be an important part, but you must also consider the role life insurance and long-term care insurance will have.

Life Insurance

There are two main types of life insurance policies: whole and term. Term life insurance is the type of life insurance that most people think of when they think of life insurance. For this kind of policy you pay a yearly premium and can name a beneficiary who would receive a payout should you die during that year. Whole life insurance also provides for beneficiary payments, but it adds an investment element as well. Whole life insurance is more expensive, but it allows you to develop an investment portfolio and borrow against the portfolio’s worth.

Long-Term Care Insurance

If you believe you might need to one day reside in a nursing home or extended care facility, long-term care insurance is a good option. If you do not want to develop a Medicaid plan or do not believe you will be able to qualify for Medicaid, long-term care insurance can help alleviate the expenses associated with nursing home care. Like other forms of insurance, it  is always best to evaluate each long-term care insurance plan in light of your needs and financial abilities.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

You never know when a medical disaster may strike, so you need to have emergency planning in place.  Take a look at the following information, to learn more.  If you have any questions, or if you’d like to discuss your individual emergency planning needs, contact an estate planning attorney.

• Make sure all of your estate planning documents and other important documents are kept together.  This will help to keep you from losing important documents and will make it easier for you or your loved ones to get the files that are needed during an emergency.
• Create an emergency fund.  You never know when you may need a large amount of money during an emergency.  If you have a fund in place, you will have access to the money that is needed and not fall prey to unscrupulous credit card companies.  It’s prudent to have enough money for up to 3-6 months of expenses in the event of job loss, illness, or another emergency.
• Purchase the insurance that you need.  You may have considered life insurance; also, consider other insurance policies as well.  This may include disability, personal catastrophic (i.e. umbrella), auto, flood, earthquake, renter, and homeowner insurances.  This will allow you to be prepared during a natural disaster.
• Have an emergency plan in place.  Talk to your family members, including your children, to make sure that they know what to do during an emergency (i.e. meet at neighbor’s house in case of fire, call estate planning attorney in case of disability or death, call Uncle Joe and Aunt Marie is anything happens to Mommy, etc.)

Protect yourself and your family by Taking time to consider your emergency planning needs.  If you’d like assistance with your emergency planning affairs, consult with a qualified estate planning attorney.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

There are many different component parts to a well rounded and comprehensive estate plan, and one very fundamental element to consider early on as you engage in long term planning is life insurance. When you are just starting out in life as a young adult, you may feel as though estate planning is not relevant to you because you have not yet accumulated significant assets. This is understandable, but life insurance is something that you can put in place as the first step toward building your legacy. When you begin your career the benefits that your company offers are very likely to include life insurance and a 401(k) program, and when you enroll in these you have begun the process of long term planning.

Life insurance can provide young single people with a sense of security knowing that their last expenses will be covered in the unlikely event of their death, but it is even more important for families. Most young families today depend on the combined incomes of both partners to maintain their quality of life, so it important to have a safety net in place. Life insurance is the ideal income replacement vehicle for people who have not yet amassed a significant nest egg, serving as a safety net that leaves your family prepared to respond to any eventuality from a financial standpoint.

For those who have reached the latter stages of life, insurance policies can address costs associated with estate administration and funerary obligations. Life insurance is also a useful tool for inheritance balancing and business succession planning.

From the earliest stages of your adult life through to your twilight years, life insurance serves a purpose. It is a good idea to make sure that you have sufficient coverage in place, and it is important to review your policies periodically as your family grows and their needs increase.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

Do you have a life insurance policy? If not, you may want to consider some of the benefits of this handy coverage. With a life insurance policy your insurance company will pay your beneficiaries a sum of money when you pass away. These funds can help your family in a variety of ways.

Replace Your Income

Are you a sole or joint breadwinner in your home? If you pass away, your family may be left with half or no income. Your spouse will have to bear the full burden of bills. Your family may even have to sell your home or other possessions. Funds from a life insurance policy can safeguard the life you have put into place for your family. It could even help your children or grandchildren pay for college.

Pay for Final Expenses

After you pass away, your family will have to pay the huge expense of your funeral and burial. If you do not have easily accessible funds in a joint account, your family members may have to scrounge for money or take out a loan.

To avoid this, you can plan ahead for your funeral expenses. A life insurance policy is a great way to do so, since your named beneficiary can quickly collect funds after your passing.

Help a Loved One with Special Needs

If you have a family member who cannot work due to special needs, he or she may benefit from life insurance funds. If this individual receives aid from the government for housing, food or medical care, you may want to avoid leaving the policy directly to your beneficiary. Speak with your attorney about creating a Life Insurance Trust or a Special Needs Trust. You can have your life insurance policy pay into the Trust and allow funds to disperse slowly over time. This will provide your loved one with extra money for living expenses while still maintaining eligibility for government aid.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

When you pass away, any life insurance policies you own will be distributed to the beneficiaries you’ve named in the policy documents.

But these policies will also be considered as part of your estate for tax purposes because you own them.

An Irrevocable Life Insurance Trust is a tool that many people use to exclude their life insurance from the value of their estate.

And here’s how it works:

You transfer ownership of your policy to your chosen trustee and make the Trust the beneficiary. By doing this, you give up control of the policy and therefore, the value of the policy is no longer considered part of your estate. And if it’s not part of your estate, your heirs won’t pay estate taxes on the proceeds.

But before you do this, there are a few things to consider:

First, by giving up ownership, you forfeit all rights to the policy. That means that it’s irrevocable and you can’t change your mind later.

In addition, you cannot be the trustee of the Trust or you lose the tax-free benefits you’re trying to get. That means you’ll need to hire someone or at the very least, find someone who you trust implicitly to serve as trustee.

Also know that if you’re planning to transfer an existing life insurance policy, you must be certain that you’ll live at least another three years after the transfer. If not, the transfer won’t be recognized and the proceeds will be made part of your estate.

To learn more about ways to minimize estate taxes, contact our office today.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.