How Life Insurance can help with Estate Planning
Life insurance can make estate planning a much smoother experience.
Do you know what happens to your stuff, your assets when you die? Do you want your business, your house, your investments to go to someone you choose? Or do you want the government to dictate what happens to your estate when you pass?
If you think you know better what to do with your money than Ottawa does, then this video is for you.
If you want to send Ottawa all your money when you die instead of leaving it to your family or causes you believe in, then scroll on because this video is not for you.
There’s a huge tax due on all your assets when you die. And your estate needs to pay these taxes out before any of your legacy can be passed on to your loved ones.
The executor of your will also has to find all your assets and make sure they go to who you wanted them to go to.
This whole system is called probate and right now with government delays it can take 18 – 24 months for a clean will to go through probate.
Hopefully your family likes each other and there are no disputes because that will add months or years to settling your will.
While all of this is going on, there are still a lot of bills that need to get paid. Just because you’re not here doesn’t mean all your monthly expenses stop.
So, while your will is being settled and going through the probate process it’s good to have some easily liquid money to pay for your capital gains on death and income taxes and to pay the monthly bills like rents or mortgages, electricity etc. that need to get paid on your house or properties. There are also usually funeral expenses to consider.
Getting money to pay all these things is hard because all your money is tied up in the estate until the probate process is through – and that can take months to years to settle.
This is where having some life insurance can come in very handy. When you die, life insurance pays out quickly and tax free and pays outside the estate directly to your beneficiaries.
What does that mean? Right now, most of Canada’s big insurance companies will pay out a death claim within 7-10 days of receiving the right paperwork. Having that quick, guaranteed payout to the family relieves so much pressure and is so invaluable when the worst just happened, and people are going through a traumatizing time.
That’s it. Life insurance pays out tax free, quickly and privately outside of the estate and that’s why it plays such an important role in Canadian’s estate plans.
Contact Us
At Safe Pacific Financial, we specialize in helping Canadian business owners, incorporated professionals, and investors structure life insurance for maximum wealth protection, tax savings, and business growth.
If you would like to discuss whole life insurance or investments, we’re happy to chat and see if we can be a good fit to work with you. Fill out our contact form and we will get back to you within 24 hours on business days.
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