Consider Insurance — Your Estate Plan Will Thank You

Published: March 24, 2017

Preserving the value of your estate is a key component of managing your wealth. At Klingenstein Fields Advisors we know there are steps you can take to help reduce the impact of taxes on your estate and provide for the distribution of your assets. These steps include having a carefully designed estate plan, making sure your will is up to date, and using strategies, such as life insurance, to help you achieve your legacy and philanthropic estate goals.     

Klingenstein Fields Advisors does not sell insurance or receive compensation from any insurance providers. But as wealth planners, we can show you how using insurance as part of an estate planning strategy can:   

Provide liquidity to pay estate taxes. If the value of an estate is above the exemption amount (in 2017, federal: individual $5.49MM or married couple: $10.98MM, and several states have additional estate tax requirements), then the heirs must file an estate tax return and pay taxes. Sometimes, however, an estate consists of illiquid assets, such as real estate, jewelry, art, other possessions or securities. These may be assets that heirs want to keep, but could be forced to sell to obtain the cash necessary to pay taxes. Or it may not be the best time to sell assets, such as real estate, if the market is not favorable. A life insurance policy may provide the liquidity needed to cover estate taxes. 

Allow you to give equally to your heirs. You may have multiple heirs and wish to leave a major asset, such as a home, art collection or family business, to one heir. You can provide for your other heirs by purchasing a life insurance policy(s) that will pay out an amount equivalent to the value of the asset.

Achieve both gifting and legacy goals. Charitable gifting through insurance can help you to achieve your philanthropic goals while still preserving your other assets for your heirs. Life insurance can be used in a variety of ways, ranging from assigning or donating an existing policy or the dividends from a policy, to designating a charity as the primary beneficiary on a current or new policy. These techniques may allow you to make a substantial gift to a cherished cause with a smaller impact on your estate than if made by a bequest. 

Utilizing insurance within a trust structure can further assist in achieving your goals in a potentially more tax-efficient manner. Klingenstein Fields Advisors welcomes the opportunity to meet with you and discuss insurance and estate planning strategies that may be appropriate for your unique circumstances.  

Important Disclosures

This material is provided for informational or educational purposes only and should not be construed as investment, accounting, tax or legal advice. Always consult a financial, tax and/or legal professional regarding your specific situation. This communication is not intended as a recommendation or as investment advice of any kind. It is not provided in a fiduciary capacity and may not be relied upon for or in connection with the making of investment decisions. Nothing herein constitutes or should be construed as an offering of advisory services or an offer to sell or a solicitation to buy any securities or a recommendation to invest in any specific investment strategy. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future returns. The views expressed herein are as of a particular point in time and are subject to change without notice. The information and opinions presented herein are general in nature and have been obtained from, or are based on, sources believed by Klingenstein Fields Advisors (“KF Advisors’) to be reliable, but KF Advisors makes no representation as to their accuracy or completeness. Although the information provided is carefully reviewed, KF Advisors cannot be held responsible for any direct or incidental loss resulting from applying any of the information provided. KF Advisors represents two investment advisers registered with the Securities and Exchange Commission: Klingenstein, Fields & Co., L.P. and KF Group, LP. If you are a KF Advisors client, please remember that it remains your responsibility to advise KF Advisors, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services.