Over the next several decades, roughly $30 trillion in wealth will be transferred from grandparents and parents to their children and grandchildren. Therefore, it’s important for Nevada residents to plan how the assets will be transferred. This may be made easier through the use of a life insurance policy. These policies can provide cash that might be needed immediately following a person’s death.
The money could be used to pay for anything from final expenses to estate taxes. In some cases, an individual’s estate may have to pay taxes on the federal and state level. If the estate needs to go through probate, there will be a wide range of fees that will likely need to be paid. With a life insurance policy, cash is provided quickly after a person passes. That is important because taxes and other costs may need to be paid within months of an individual’s death.
While assets can be sold to meet an estate’s liquidity needs, doing so could create a number of other issues. For instance, it may be necessary to pay taxes on the money raised by selling an asset. In some cases, assets will be sold for less than they are worth because an estate is in a hurry to raise capital.
Putting an insurance policy in a trust may grant it special tax treatment. It could also give an individual greater control over how a death benefit is disbursed or allow the asset to avoid probate. An attorney can explain further benefits of a trust and how to create one. Legal counsel may also provide insight into other estate planning tools that might help a person meet his or her goals.