LaGrange: 1023 W 55th St #200, LaGrange, IL 60525 | Deerfield: 770 Lake Cook Rd #100, Deerfield, IL 60015
LaGrange: 1023 W 55th St #200, LaGrange, IL 60525
Deerfield: 770 Lake Cook Rd #100, Deerfield, IL 60015
LaGrange: 1023 W 55th St #200, LaGrange, IL 60525
Deerfield: 770 Lake Cook Rd #100, Deerfield, IL 60015
Securing Your Children’s Future with Life Insurance Strategies
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At Wilson & Wilson Estate Planning & Elder Law LLC, we understand that one of your top priorities is ensuring the financial security of your children in the event of your untimely passing. Life insurance can be a vital component of safeguarding your legacy and providing for their future. Below, we explore key considerations for incorporating life insurance into your estate planning.
Key Considerations When Thinking About Life Insurance for Your Children
It’s natural for parents to worry about the well-being of their children should something happen to them. Life insurance is often the first solution that comes to mind. However, before investing in a policy, it is crucial to evaluate your actual need for life insurance, the optimal policy type, and how the policy proceeds will be managed for your children’s benefit.
Evaluating Your Life Insurance Needs
Before you commit to a life insurance policy, consider all potential income sources that would be available to your children in your absence, such as:
- Assets you may leave behind
- Social Security survivors benefits
- Potential support from extended family members
If your estate or relatives can comfortably provide for your children, life insurance may be less critical. On the other hand, for many families, life insurance is an affordable safety net that addresses the possibility of a parent’s premature death.
Choosing the Right Life Insurance Policy
While various life insurance policies exist, such as whole life, universal life, and variable life, these can be costly and offer benefits that may not align with your immediate goals. Term insurance often makes the most sense for young, healthy parents. It provides substantial coverage at a lower cost and secures immediate funds for your children if needed, without excessive current financial strain.
Designating How Your Children Will Receive Life Insurance Benefits
It is imperative to have a structure in place for how life insurance proceeds will be managed on behalf of your children, should they be minors at the time of your passing. Without this, a court-appointed guardian would assume control, leading to potential legal expenses and complications. To avoid this, consider the following options:
- Designate a trustworthy adult as the policy beneficiary to manage the funds for your children.
- Assign an adult custodian under your state’s Uniform Transfers to Minors Act (UTMA) to manage the policy’s benefits, as permitted by most insurance companies.
- If you have a living trust, name the trustee as the beneficiary, detailing within the trust how any insurance proceeds will be managed and disbursed to your children.
UTMA Custodianship vs. Child’s Trust—Which Is Best for You?
When it comes to selecting between UTMA custodianship and a child’s trust for managing life insurance benefits, key distinctions include:
- Age of financial independence: UTMA requires transfer of funds at a legal age limit, while a trust allows you to set a specific age.
- Tax implications: Trust income is taxed at a higher rate, whereas UTMA funds are taxed at the child’s individual rate.
- Administrative ease: UTMA often offers a more streamlined approach, recognized by financial institutions.
UTMA custodianships are generally suitable for amounts below $100,000, which are often quickly utilized for education and living expenses. For substantial insurance proceeds, or if you wish to extend financial oversight beyond the UTMA age limit, a child’s trust may be more appropriate.
Planning Your Next Steps
Wilson & Wilson Estate Planning & Elder Law LLC is here to guide you through these important decisions. We provide comprehensive advice on life insurance options and the incorporation of children’s trusts into your estate plan, ensuring your intentions are clear and your family is protected.
For knowledgeable guidance and peace of mind, contact us today at (708) 482-7090 for a Consultation and let our insight in estate and elder law help secure your family’s future.
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Wilson & Wilson Estate Planning & Elder Law, LLC helped me navigate a very tumultuous time in my life. Sandra and her team were so gentle with me and the processes that needed to take place for a timely distribution. They worked tirelessly to ensure I was supported throughout the process. Although no one is actually prepared for the death of their loved one Sandra made going through it less painful. I’m forever...
Bill Wilson and his staff are amazing! We have known Bill for over 25 years and have trusted him to handle our different legal situations. From his expertise in our estate planning to seeking his advice on handling our elder relative's estate, we are confident we have the best protection by using Bill. My family and I are truly thankful for his knowledge and patience when dealing with such personal and tough conversations...
GOD has blessed me with alot but by people's standards maybe not that much; however Attorney Sandra Schildgen made me feel like a Billionaire! It is also noteworthy that from the front office and assistant personnel gave that feeling "we are family". I look forward in continuing our relationship in the future. GIVE Wilson & Wilson your business.
Great attorneys, and great staff in general, all knowledgeable and extremely helpful..
Everyone was really professional and helpful with assisting me with Estate Planning!
Mr. Wilson has helped our family VERY MUCH. His "down to earth" honesty and integrity made what could have been a difficult situation easy to get through. AND, we felt his rates were reasonable for the personal service we received. HIGHLY RECOMEMDED.
Wilson & Wilson has the experience, knowledge and professionalism to handle complex estate planning needs.They address all the details and devise a tailored plan providing asset protection, growth and wealth management.
I can’t say enough about the way Sandra, Kayla and Jennie handled my legal needs. The Medicaid process for my husband was very complicated for me but this team of professionals handled all of it and kept in touch with me through the entire process. Every concern and question I had was promptly addressed and I am very satisfied with the final outcome from the appeal Sandra filed for us. In addition to...
Our experience with Wilson and Wilson in updating our estate planning documents was great. Sandra and Kayla were wonderful to work with. Sandra took the time to make sure we understood the language and elements of each document. She is very knowledgeable thorough understanding and open to suggestions and changes. The work was completed in a minimum amount of time. We feel fortunate to have had such a great worry-free experience working with...
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