Host: Who needs Life Insurance?

Bob Ley: If someone depends on you financially, chances are you need Life Insurance. If you are married, most couples depend on two incomes to make ends meet. Life Insurance makes sure that your plans for the future don't die with you. If you are a single parent, you are probably also the bread winner, cook, chauffeur and so much more. With so much resting on your shoulders, you need to make sure you have enough Life Insurance to safeguard your children's financial future. You work a lifetime to accumulate an estate, however, at your death, the asset you pass on to your heirs maybe subjected to Federal Estate Taxes and State Inheritance Taxes. If your estate is subject to estate taxes, taxes are due usually, within nine months of your death. Life Insurance can play an important role on Estate Planning by providing the funds necessary to pay estate taxes and expenses and provide liquidity so these expenses can because paid. Some expenses that must be paid upon an individual's death maybe include, but are not limited to Federal Estate Taxes, State Inheritance Taxes, Probate fees, legal and administrative fees, deaths, funeral expenses, final medical expenses. There are four options to pay estate taxes and expenses. One, use cash on hand. Two, borrow the money. Three, pay the IRS in installments under Internal Revenue Code Section 61, 66 or pay now by purchasing a Life Insurance policy and in many cases, be paying for pennies on the dollar. Proper planning involves identifying and estate transfer cost using available tax breaks to reduce cost and determining the least expensive method of paying for remaining taxes and costs. A Life Insurance funded Irrevocable Trust can be one of the most cost effective ways to pay for estate taxes. Consult your tax professional to determine the effect of Federal Estate Taxes on your individual situation.