- September 17, 2021
Most of you have heard the financial horror stories that come from the costs of care toward the end of your life. You may have even heard about family members, happily married, considering divorce as an option to protect assets from being reduced by expenses for care. You might also have heard of Life Insurance but haven’t purchased any yet, or are unaware of another type of insurance, long term care insurance.
As an Estate Planning Attorney, I see Life Insurance as a tax friendly way to pass wealth to family members. Long Term Care Insurance is another type of insurance that can prevent you from losing years of savings on one illness later in life.
Life insurance historically has been used to pay for those expenses that come from a death. A married couple with two incomes loses a large portion of that income on the passing of a loved one. The problem is multiplied with children, and can be scariest if there is a death soon after the purchase of a home. Life insurance can make financial burdens in those situations easier to address.
Life insurance can also be a tool to address the burden of taxation on heirs in transferring deferred IRA’s and 401K’s. An experienced agent or financial planner can help you to determine whether purchasing life insurance would be an option for you.
In September, Money.com published this article (https://money.com/best-life-insurance/) about the best insurance companies of September 2021. It goes through the strengths of each individual company and is a handy list of organizations who might be able to help.
Long Term Care Insurance addresses the horror stories you might have heard of. The story usually involves a life changing and long-term prognosis regarding one spouse that could cause a reduction in the estate after normal health care options are exhausted. This type of insurance covers long term care in facilities or at home that is required to address those medical issues over a long period of time.
Without long term care insurance, the estate must be spent down in order to obtain governmental assistance. Each state has their own rules as to what amount an estate can still hold and obtain care so be sure to meet with an attorney in your state to determine what the best course of action might be.
If you have any questions in Arizona about how your life insurance or long-term care insurance might work with your estate plan, please give us a call at (480) 994-500.