According to recent research, 42 percent of the baby boomer generation doesn’t have any kind of estate plan in place, despite the fact that the youngest boomers turn 55 in 2019. Among those who do have plans in Georgia and across the country, many have not updated them for years. Baby boomers have more wealth, approximately $30 trillion, than any other generation in the history of the United States. Passing that wealth on to the right people when they die might require more planning than other generations have needed.
Life insurance policies are a good option for boomers whose heirs may need capital right away to take care of final expenses. Insurers can typically provide policies designed to cover funeral expenses, outstanding debts and medical bills. Life insurance proceeds can also go toward the payment of probate and estate administration expenses. Distributing assets and closing an estate can include fees for accountants, appraisers, attorneys and an executor. There may also be court costs and other expenses associated with probate. Those with larger estates can expect probate to cost more.
Life insurance proceeds might also cover estate taxes so that the heirs of the decedent do not have to pay them. The federal estate tax, which must be paid in cash in most cases, is due within nine months after the date of death. Payment of inheritance taxes and state estate taxes may also be required.
Because there are several expenses that must be paid soon after a person’s death, life insurance is a beneficial estate planning tool in many cases. An attorney with experience in estate planning law might be able to help by examining the client’s situation and suggesting instruments to effect the transfer of assets and the payment of liabilities. An attorney might create trusts or establish life insurance policies, both of which generally avoid probate, on the client’s behalf.
