• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Unsworth LaPlante, PLLC

Vermont Estate Planning Attorneys

Vermont: (802) 879-7133

Attend A Free Workshop
  • Home
  • Our Firm
    • About Our Firm
    • Meet Our Team
    • What to Expect When Working with Us
  • Services
    • Estate Planning
    • Incapacity Planning
    • IRA & Retirement Planning
    • Legacy Planning
    • LGBTQ Estate Planning
    • Medicaid Planning & Elder Law
    • Pet Planning
    • Special Needs Planning
    • Trust Administration
    • Young Families Planning
  • Resources
    • Articles
    • Elder Law Reports
    • Elder Law Resources
      • Burlington
      • Montpelier
      • Rutland
      • St. Johnsbury
      • White River Junction
    • Estate And Gift Tax Figures
    • Free Estate Planning Worksheet
    • Frequently Asked Questions
      • Elder Law
        • In-Home Elder Care
        • Medicaid
        • Planning for Long-Term Care
      • Estate Planning
        • Business Succession Planning
        • Estate and Gift Tax
        • Estate Planning for Blended Families
        • Estate Planning for Parents
        • FAQs for Families Without an Estate Plan
        • LGBTQ Estate Planning
        • Taxes on Inheritances in Vermont
      • Incapacity Planning
      • IRA & Retirement Planning
      • Gift, Estate, and Inheritance Taxes
      • Legacy Wealth Planning
      • Philanthropy and Estate Planning
      • Pet Planning
      • Revocable Living Trust
      • Special Needs Planning
      • Trust Administration
      • Trusts
      • Wills
    • Is Your Estate Plan Outdated?
    • Medicaid Resources
      • Medicaid Analysis Worksheet
      • Medicaid Guide
      • Vermont Medicaid
    • Newsletters
    • Presentations
    • Reports
      • Advanced Estate Planning
      • Basic Estate Planning
      • Estate Planning for Niches
    • SECURE Act
    • Top Estate Planning Techniques
  • Webinars/Seminars
  • Reviews
    • Our Reviews
    • Review Us
  • BLOG
  • Contact
Home » An Overview of Estate Planning With Life Insurance

An Overview of Estate Planning With Life Insurance

April 21, 2021 by Stephen Unsworth

inheritance balancingA lot of people that do not have estate plans fail to take action because they do not have a significant store of resources to pass along. If you are single and no one is depending on you, this is understandable, but there are reasons why everyone should have a plan in place.

This being stated, if you are married, an income replacement vehicle is a must. The necessity is magnified if you have children, and life insurance can fit the bill.

Term Life Insurance

One of the two most commonly used types of insurance is term life. As the name would suggest, this type of coverage remains in place for a certain prescribed term. You decide on the length of the term when you get the policy.

Term life is typically used as a relatively short-term income replacement solution, so few people will obtain coverage for the maximum term. The insurance has no cash value as long as you are living, and this is negative on the one hand, but the premiums are quite low.

To give you an idea, a 35-year-old female would pay between $18 and $29 a month in our area depending on their health. For a male, the average cost is in the $20-$34 range.

Clearly, the odds are in the trust company’s favor when someone takes out a term life policy when they are relatively young. At the same time, what is the value of your family’s well-being if something was to happen to you? It is not worth the risk when the coverage is so affordable.

Whole Life Insurance

The other type of insurance that is most widely utilized is whole life insurance. When you pay the premiums, a portion is dedicated to accumulating a cash value. After you have paid into the policy sufficiently, you can take a loan against the cash value or withdraw the funds.

Since it has value as an investment vehicle, the premiums are much higher than term life insurance premiums. For a woman between the ages of 35 and 45, the monthly premium would be in the $245-$349 range for $250,000 of coverage.

Inheritance Balancing

In addition to the income replacement utilization and the use of the death benefit as a legacy enhancer, life insurance can facilitate inheritance balancing.

To explain through the use of a simple example, we will say that John has a thriving construction business, and he has two children. His daughter has a business degree and she has helped John run the business throughout her entire working career.

John’s son decided to go in a different direction. His daughter is going to inherit the construction company, which is his most valuable piece of property, but John wants to leave equal inheritances to his two children.

To balance the inheritances, he could make his son the beneficiary of a life insurance policy that will pay an amount that is equal to the value of the construction business.

Buy-Sell Agreements

Partners in small businesses can use buy-sell agreements to ensure a smooth and fair succession process after the passing of a partner. With the cross-purchase plan, the partners take out life insurance policies on one another. The proceeds will equal the value of a share in the business.

After the death of a partner, the proceeds will be collected, and they will be used to purchase the deceased partner’s share from their estate.

This type of agreement does not necessarily have to revolve around the use of life insurance. The partners can agree on a buyout price to allow for retirement or an exit for some other reason.

Attend a Free Webinar!

If you would like to learn more about the estate planning process, we have some great opportunities coming up in the near future. Our attorneys are conducting a series of webinars, and they are being offered free of charge.

Since you do not have to go anywhere to participate, this is a great way to spend a little bit of your spare time. You can see the dates if you head over to our webinar page, and when you identify the session that works for you, follow the simple instructions to register.

 

  • Author
  • Recent Posts
Stephen Unsworth
Stephen Unsworth
Stephen A. Unsworth is admitted to practice in both Vermont and Maine, and has more than 30 years of experience in estate planning and business law. His mission is to provide quality estate planning services, including assistance with Living Trusts, Wills, Medicaid Planning, Probate, Trust Administration, Powers of Attorney, Special Needs Planning, and Family Limited Partnerships.
Stephen Unsworth
Latest posts by Stephen Unsworth (see all)
  • Does My 401(k) Account Count for Medicaid Eligibility? - October 20, 2022
  • Senior Care Options - October 18, 2022
  • Is an Oral Will Valid in Vermont? - October 13, 2022

Filed Under: Uncategorized Tagged With: Estate Planning, buy-sell agreements, inheritance balancing

Other Articles You May Find Useful

Essex Junction elder law attorneys
What You Need to Know about Elder Abuse
Essex Junction Medicaid planning attorneys
How to Apply for Senior Medicaid in Vermont
Planning for the “Silver Tsunami”
Discharge of Indebtedness Income and Student Loan Forgiveness
More than Just Salad Dressing: The Ongoing Saga of Newman’s Own Foundation
Essex Junction Medicaid planning attorneys
Does My 401(k) Account Count for Medicaid Eligibility?

Primary Sidebar

Elder Law and Medicaid Planning Attorneys

Unsworth LaPlante, PLC

DOWNLOAD OUR FREE ESTATE PLANNING WORKSHEET

There's a lot that goes into setting up a comprehensive estate plan, but with our FREE worksheet, you'll be one step closer to getting yourself and your family on the path to a secure and happy future.

  • This field is for validation purposes and should be left unchanged.

Follow Us

  • Facebook
  • Instagram
  • LinkedIn
  • Twitter
  • YouTube

Blog Subscription

Sign up to Unsworth LaPlante's estate planning blog to receive all the latest news and updates.

  • This field is for validation purposes and should be left unchanged.

Essex Junction, VT

26 Railroad Ave
Essex Junction, VT 05452
United States (US)
Phone: (802) 879-7133
Fax: (802) 879-0408

Map

unsworth_sidbr_map

Office Hours

Monday8:00 AM - 4:00 PM
Tuesday8:00 AM - 4:00 PM
Wednesday8:00 AM - 4:00 PM
Thursday8:00 AM - 4:00 PM

Footer

footer-logo
  • Facebook
  • Instagram
  • LinkedIn
  • Twitter
  • YouTube

The information on this Vermont Attorneys & Lawyers / Law Firm website is for general information purposes only. Nothing on this or associated pages, documents, comments, answers, emails, or other communications should be taken as legal advice for any individual case or situation. This information on this website is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship.

American Academy of Estate Planning Attorneys, Inc. Privacy Policy | Contact Us | Disclaimer | Site Map | Powered by American Academy of Estate Planning Attorneys

© 2023 American Academy of Estate Planning Attorneys, Inc.