3 Reasons to Update Your Estate Plan When You Purchase Life Insurance
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3 Reasons to Update Your Estate Plan When You Purchase Life Insurance

by | Jul 1, 2022 | Firm News |

 

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When you purchase life insurance, it’s important to update your estate plan to reflect your new coverage. Here are three reasons why:

  1. Life insurance should be one part of a broader estate plan.

Your life insurance policy is just one piece of the puzzle when it comes to planning for your family’s future. Make sure your estate plan takes into account your new coverage so that your loved ones are taken care of in the way you want.

When people think of an estate plan, they often times think of a plan for multi-millionaires. This simply is not the case. An estate plan is for anyone who has a family. It incorporates your plan for what to do with even your checking account. Essentially every-one has a checking account and should at least know who will be the beneficiary of that account.

Even for average, hardworking Americans, a decent estate plan should likely include a life insurance policy, banking and brokerage accounts that are payable on death or transferable on death to your beneficiary, a Last Will and Testament, a Power of Attorney, and Advance Medical Directives. These are fairly basic documents that should fully prepare the estate of most Americans. Those with more significant assets may need more advanced plans such as trusts, perhaps corporate vehicles, gift planning, and perhaps what is known in Florida as an Enhanced Life Estate (commonly called a Lady Bird Deed). Yet, most hard-working Americans only need a basic estate plan.

  1. You’re already thinking about planning for your family.

If you’re purchasing life insurance, it’s likely that you’re already thinking about what would happen if you weren’t around anymore. Updating your estate plan ensures that your wishes are carried out in the event of your death.

It’s never any fun thinking about worst case scenarios, especially your own death. But you’re not doing it for yourself. You’re doing it for your family.

A good estate plan, even if it’s just a basic estate plan, will put not only your mind at ease, but your family’s mind at ease. Often, your family feels some level of stress when they know there is no plan if something happens to you. When you give them a plan, it relieves some of that minor stress. It doesn’t mean anything will hap-pen to you anytime soon, but it will put everyone at ease.

An estate plan, like a life insurance plan is really some-thing you are doing because you love your family and want to take care of your family. Let’s be honest, you’re not buying life insurance for yourself–it’s for your family. Finish the job and plan the entire estate; it’s for your family.

  1. Your family will thank you for it.

No one likes to think about their own mortality but up-dating your estate plan is a selfless act that will benefit your loved ones in the event of your death. Make sure they are taken care of by taking care of your estate planning today.

When a loved one dies, there is sadness and grieving. It is unbearable and often feels like the worst pain we’ve ever felt. Yet, what people often don’t realize is that there is a lot of work that comes with losing someone. There is legal paperwork, and confusion. It’s a good estate plan that can make things simpler for everyone.

When you have a good estate plan, your family won’t have to guess what you wanted done with your property and how you wanted your funeral. But, it’s also not really for you. It’s for them. Without a clear plan, your family will be trying to guess at what you wanted. They won’t know where your accounts are located. They won’t know who will pay the funeral expenses or how they are paid. They won’t have time to grieve because of the work and stress.

Many times, families tell attorneys that they wish their loved one would have done a better job planning the estate. However, the families generally never say that they are sad that they didn’t get to decide how to do it for their loved when the loved one has established a good estate plan.

Yes, some of it is about money, which is why you purchased life insurance. Yet, much of planning your estate is about giving your family guidance as they go through one of the most difficult moments they will ever face in their life. After all, you are doing this for your family, and as much as you don’t want to think about your own mortality, your family will thank you for it.

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