How do you ensure that you’ll be remembered as time and generations continue after you’re gone? One way to create a legacy is through the use of life insurance.
According to this article in MarketWatch, “5 ways to make a great impression after you’re dead,” life insurance is the Swiss Army knife of creating a legacy to ensure that you are remembered long after you have passed. That includes a legacy to loved ones as well as your community or causes that matter to you.
The payout from a life insurance policy—known as a “death benefit”—can be used to create a legacy. It’s even more than that for someone who wants to leave a legacy to their spouse and children. A life insurance policy can have a direct impact on individual lives, after you’ve passed away.
Immediate family first. The greatest legacy that you have is your family. Life insurance can assist with financial protection for them. If you have family who rely on your income for their day-to-day lives, think of them when deciding on life insurance and the amount of coverage you need. Your legacy can live on through a death benefit that can pay off the family home mortgage, contribute towards college tuition or help start a business. It can ultimately provide income that helps your loved ones continue to meet their financial needs, if you’re no longer around.
Be the “cool” aunt or uncle. Your nieces and nephews may not need a life insurance policy from you to cover their day-to-day financial needs. However, naming your nephew as a beneficiary of your life insurance policy is a gesture that would cement you as the best aunt or uncle ever. There are numerous uses for life insurance that could help your extended family. Be sure to talk to your siblings to make them aware, set expectations and allow them to factor the money into their family’s overall financial plans. A big influx of cash could have an impact on student aid, so it’s an important conversation to have.
Remember a legacy to your favorite charity. Maybe your legacy should be giving back to your favorite charity, like one dedicated to finding a cure for a disease or animal rescue. Life insurance offers the way to help charities after you pass. You can still continue giving back and advocating for what you believe in, after you are gone. Alternatively, you can name a trust as the beneficiary of your life insurance policy and provide the trust with specific instructions to give a certain amount of your estate to the charity when you die. You could also use your life insurance to establish a scholarship at your alma mater. Contact your school’s development or advancement office for assistance.
Talk with your estate planning attorney about how a life insurance policy can be a part of creating your legacy. You’ll want to make sure that the policy and your beneficiary designations are aligned with your estate planning objectives.
Creating an Irrevocable Life Insurance Trust is a great way to provide for your beneficiaries with life insurance and leave a legacy. There are many other additional benefits of creating an Irrevocable Life Insurance Trust. If you would like to meet with a qualified and experienced estate planning attorney about creating an estate plan, or adding an Irrevocable Life Insurance Trust to your estate plan, please contact us today.
Reference: MarketWatch (May 8, 2017) “5 ways to make a great impression after you’re dead”