KEY TAKEAWAYS
- Helps cover expenses and taxes without forcing the sale of assets.
- Useful when dividing complex or illiquid assets like businesses or real estate.
- Ensures loved ones receive an inheritance—even if other assets are depleted during your lifetime.
Beyond covering estate taxes, life insurance can provide immediate liquidity and flexibility when it matters most. Even when an estate wouldn’t owe any federal estate taxes, life insurance can play a useful role in your overall financial and estate plan.
Here are some of the advantages of considering life insurance as part of your financial plan.
Liquidity When it Matters Most
A life insurance death benefit can help assure your loved ones have cash readily available when they need it most to cover expenses such as:
- Funeral costs
- Capital gains taxes
- Income taxes
That liquidity can reduce financial stress and make it easier to settle the estate efficiently—without needing to sell assets at an inopportune time.
Estate Equalization
Not all assets are easy to divide. Family businesses, real estate, or concentrated investments can complicate inheritance decisions.
For example, if one child is actively involved in a family business and another is not, passing the business to the active child may make sense—but it can create an imbalance. Life insurance can help offset that difference, allowing each heir to receive a more equitable share.
Supporting Blended Families
Blended families often add complexity to estate planning. Life insurance can help ensure that children from a previous marriage receive a defined inheritance—without relying on a surviving spouse to distribute assets later. This clarity can help reduce potential conflicts.
Protecting Your Legacy
Should you need to draw down more of your assets during your lifetime than originally expected, life insurance can help replace that value for your heirs. In many cases, the death benefit is received income tax-free, enhancing the overall benefit (though it’s important to consult a tax professional for specifics based on your situation).
Life insurance isn’t just a safety net—it’s a versatile planning tool that can bring clarity, fairness, and stability to your estate plan. Contact your Financial Advisor for more information.
Working With Janney
Depending on your financial needs and personal preferences, you may opt to engage in a brokerage relationship, an advisory relationship or a combination of both. Each time you open an account, we will make recommendations on which type of relationship is in your best interest based on the information you provide when you complete or update your client profile.
If you engage in a brokerage relationship, you will buy and sell securities on a transaction basis and pay a commission for these services. Our recommendations for the purchase and sale of securities will be based on what is in your best interest and reflect reasonably available alternatives at that time.
If you engage in an advisory relationship, you will pay an asset-based fee, which encompasses, among other things, a defined investment strategy, ongoing monitoring, and performance reporting. Your Financial Advisor will serve in a fiduciary capacity for your advisory relationships.
For more information about Janney, please see Janney’s Relationship Summary (Form CRS) on www.janney.com/crs which details all material facts about the scope and terms of our relationship with you and any potential conflicts of interest.
By establishing a relationship with a Janney Financial Advisor, we can build a tailored financial plan and make recommendations about solutions that are aligned with your best interest and unique needs, goals, and preferences.
Contact us today to discuss how we can put a plan in place designed to help you reach your financial goals.
Janney Montgomery Scott LLC, its affiliates, and its employees are not in the business of providing tax, regulatory, accounting, or legal advice. These materials and any tax-related statements are not intended or written to be used, and cannot be used or relied upon, by any taxpayer for the purpose of avoiding tax penalties. Any such taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor. Janney makes no representation that an individual will obtain gains or losses similar to those illustrated. The concepts illustrated here have legal, accounting and tax implications.
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