Life insurance can be an important part of a comprehensive real estate planning strategy. By purchasing life insurance, individuals are able to provide financial security to their loved ones in the event of their passing with the opportunity to establish a family bank concept. It is also possible for those with existing real estate holdings to use life insurance as a means of financing their investments or even liquidating income producing assets.
Investing in real estate can reap incredible rewards when combined with life insurance. That is why it is a valuable tool for real estate planning, and today we’ll discuss the three primary advantages.
#1 Lower Taxes
Life insurance can offer an effective strategy to reduce or even eliminate the burden of estate taxes. By taking out a life insurance policy, you can essentially pay the taxes up front and leave more of your estate to your heirs. Your policy can be structured in a number of ways, such as designating an irrevocable trust as the beneficiary, so that it pays out at death and covers any expenses related to inheritance taxes. This can help you ensure that your loved ones are taken care of when you are gone. Additionally, life insurance can provide an extra source of liquidity for your heirs that would have otherwise been used to pay the estate taxes. This could allow them to better manage their inheritance and keep it for many years to come.
#2 No Probates
Life insurance is a great way to avoid probate and provide financial security for your family or loved ones. With life insurance, the proceeds are paid out quickly and directly to your beneficiaries after you pass away, bypassing any probate process. This ensures that they will have access to the funds right away, allowing them to pay off any debts or expenses that would arise from your passing and providing them with some peace of mind during a difficult time.
Probate can be an expensive process as well, often taking 7-10% of the estate value in legal costs. Life insurance not only avoids this cost but also provides assurance that there will be money available for heirs regardless of how much debt was accumulated before death.
#3 Financial Legacy
Permanent life insurance is an effective way to build and protect a financial legacy. It can offer tax advantages that make it easier for charities to receive contributions, helping to ensure your donations continue on even after you’re gone. Additionally, trusts set up with permanent life insurance policies provide access to the cash value of the policy, allowing family members and other beneficiaries to live off of the proceeds while still receiving a tax-advantaged inheritance.
Unlock the value of your life insurance policy by leveraging it to secure a loan. Borrowing against life insurance or borrowing from your life insurance with this innovative concept. Our experts are standing by to help you explore these opportunities – contact us today! https://pantheoninvest.com/contact/