Is Survivorship Life Insurance Right for You?

Share Post: facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.

Published by Mark Petersen

Do you own a family farm or privately held business which you would like to keep in the family? A survivorship policy works well and may be recommended to create estate tax liquidity when a significant taxable estate value is held in one or more illiquid assets. Fair value may not be realized by having to sell illiquid assets quickly to pay an estate tax liability, which is due 9 months after a surviving spouse’s death. 

Survivorship, also known as “second to die” life insurance, is based upon two lives instead of one –typically a husband and wife. Premiums are paid until the second spouse dies, at which time the death benefit is paid to the beneficiaries of the survivorship policy. If the policy is owned by an Irrevocable Trust and the trust is the beneficiary of the policy, the death benefit may not be taxable in the insured’s estate and also may not be subject to income tax.

A survivorship policy also works well and may be recommended to create potentially tax-free funds for children to replace the value of assets given to charity by a decedent. Gifts to charity are tax deductible by the estate. This will help to minimize a taxable estate value and thereby reduce the estate tax liability. However, gifting assets to charity decreases the amount available to leave the heirs. A survivorship policy death benefit may serve to replace the estate value and create a guaranteed amount of inheritance for heirs.

Family finances change over time, as do parents wishes to provide for their children and grandchildren. It is therefore important to plan over a lifetime to understand how changing circumstances may impact your financial plan and future liquidity needs. The Wealth Enhancement Group is available to help you understand if survivorship life insurance is right for your Wealth Plan goals.

Share:
facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.
Share Post: facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.

RECENT POSTS

Paying for Health Care in Retirement

By Ryan Yamada, Senior Wealth Planner    When putting away for retirement, we often dream about all the things we’ll be able to do with that money – traveling, going out to eat, maybe trying new hobbies. 

Senate Addresses Taxes, Deficit, Inflation, Health Care in Proposed Bill

By Jamie Hopkins, Managing Director, Wealth Services  Sonu Varghese, Director, Investment Platforms; and Ryan Detrick, Chief Market Strategist, contributed to this report.    Senate Democrats have reached a general agreement on a bill to address climate change, taxes, health care, inflation …

Quarterly Market Outlook: What Lies Ahead for the Third Quarter of 2022?

By Scott Kubie, Senior Investment Strategist    The first half of the year proved challenging for even the most hardened of investors. High inflation. Continual losses in the S&P 500. Bear market. Fed rate hikes. It all added up to the third most volatile market in 25 years.  

Culture From the Top Down: Executive Compensation Plans Explained

By Craig Lemoine, Director of Consumer Investment Research At their most basic level, executive compensation plans are designed to attract, retain and motivate top talent and leadership. But truly successful plans are designed to be much more than providing a high salary to a key employee – …

1 2 3 87 88 89

Get in Touch

In just 15 minutes we can get to know your situation, then connect you with an advisor committed to helping you pursue true wealth.

Schedule a Consultation

TweetsFollow Us