With Donald Trump’s election and pending inauguration, many Michigan residents may be wondering about how some of the laws and regulations that Trump wants to put in place may affect your estate plan. What do some of these plans entail? And how can you prepare for these changes? In short, for the wealthy, Trump’s promise to repeal the estate tax may impact tax-related estate-planning measures for the very small percentage of the wealthy for whom the current estate tax has an impact. However, when we consider estate-planning measures concerning nursing home care, and the use of Medicare and Medicaid, many seniors may have reason to be concerned. According to a recent article in Forbes, “the election of Donald Trump, along with continued Republican majorities in the House and Senate, will likely result in major cuts in federal programs that benefit older adults and younger people with disabilities.”
Estate Planning, the Estate Tax, and Middle-Class Americans
As a recent article in the Wall Street Journal explains, Trump’s plan for estate-tax repeal, if it happens, “will give a tax cut to the very wealthiest millionaires and billionaires,” given that the current exemption is $5.45 million per person, or $10.9 million (double the individual exemption) per married couple. Most Michigan residents simply will not be impacted by the estate tax one way or another, and instead are thinking more about how they will be able to afford nursing home care and other medical treatments under the Trump administration.
If Trump’s plans with regard to the estate tax, or taxable gifts, may impact you, it is important to speak with a lawyer about creating a will regardless of how Congress will take action under Trump, and to avoid taxable gifts. But more importantly for a larger number of Americans, what might the Trump administration mean for Medicare, Medicaid, and nursing home costs?
Understanding Federal Funding for America’s Seniors
As a report from MarketWatch explains, one of Trump’s key promises has been to cut federal spending. But who will this impact most? As the report clarifies, “the biggest chunk of the budget, by far, goes to Americans who are over 65 years old.” To be sure, “in fiscal 2017, Social Security and Medicare alone will cost $1.7 billion.” Moreover, “just over a fifth of all Medicaid also goes to the over-65s—for example on nursing home costs for those who have run out of assets.”
In order to be eligible for Medicaid benefits, an elderly person must use up most of their assets in order to qualify. Given that nursing home care is so expensive, it is usually not difficult for many seniors to be eligible for Medicaid benefits for nursing home care costs. According to a fact sheet from Genworth, the median annual cost of care in an assisted-living facility in Grand Rapids is $45,450. For a semi-private room in a nursing home in Grand Rapids, the median annual rate is $93,075. And the cost of a private room in a Grand Rapids nursing home is even higher. To be sure, the fact sheet cites the median annual rate from 2015 as $101,105.
As the Forbes article explains, it is not yet clear whether—and to what extent—the Trump administration will make cuts to Medicare and Medicaid, both programs that help seniors. In the meantime, family members may need to consider financial planning to help pay for care for elderly loved ones. And it is not too late to look into long-term-care insurance options that may be able to help cover costs in the future.
Discuss Your Options with a Grand Rapids Estate Planning Lawyer
If you have questions about how Trump’s election can affect your estate planning, it is important to speak with a Norton Shores estate planning attorney as soon as possible. Contact the Law Offices of David L. Carrier, P.C. to discuss your options.
Recognizing Scams
Blog, Estate Planning, UncategorizedWhile anyone can fall prey to a scam, many con artists choose to focus their attention on the elderly. Michigan seniors may find themselves the target of any number of scams involving Medicare, insurance, and estate planning. It is important to recognize the signs of a potential scam so you (or a loved one) can avoid becoming just another victim.
Identity Theft
According to the Kaiser Family Foundation, nearly 1.9 million Michigan seniors are enrolled in Medicare, the federal health insurance program for people age 65 and older. A popular scam involves a person claiming to work for the government contacting a Medicare recipient and telling them they “need a new Medicare card.” The scammer solicits the victim’s Medicare and Social Security numbers and then uses that information to commit identity theft.
The Federal Trade Commission, which identifies and prosecutes such scams, advises all seniors to stop and contact Medicare directly (1-800-MEDICARE) before giving out any personal information over the phone.
Medicare Billing Fraud
Another common Medicare scam involves nursing homes and other health care providers. Since Medicare reimbursements are based on procedures performed, many providers treat older patients as a license to print money by ordering tests, equipment, and even surgical procedures that are medically unnecessary. Federal prosecutors have identified billions of dollars in Medicare fraud over the years as the result of such procedures.
If you have an elderly relative in nursing or long-term hospital care, it is a good idea to keep records of every procedure performed and the provider’s justification. Also, do not hesitate to ask questions if you suspect a provider is ordering unnecessary procedures. Such actions may assist prosecutors and Medicare officials in identifying fraud.
Estate Planning Scams
The Michigan Attorney General’s office also cautions seniors about the perils of a popular estate planning scam involving annuities. An annuity is a financial product sold by an insurance company. The purchaser makes a lump-sum or periodic payment to the insurer in exchange for receiving future payments.
In theory, an annuity provides a senior with a reliable income stream. But in practice, annuities are not suitable for all investors. There may be significant hidden costs and tax penalties depending on the structure of the annuity. The annuity’s benefits may also not be fully realized for many years, which makes it a poor option for a senior who requires a more liquid investment strategy.
Unfortunately, since annuities are usually sold by brokers working on commission, they may not take your individual needs into account, even though the law requires them to do so. Rather than serve the client, they serve themselves by convincing a senior to sell their existing assets and put everything into a riskier annuity. Some annuity brokers go so far as to sell their products as a form of estate planning, even though they are not attorneys licensed to practice in Michigan.
The best way to avoid such scams is to work with a qualified Michigan elder law attorney who will give you independent advice based on your unique situation. Contact the Law Offices of David L. Carrier, P.C., to schedule a consultation today.
Best Life Insurance Plan Options
Blog, MedicaidIf you are currently thinking about estate planning and are considering purchasing life insurance, it is important to consider a number of different options. As an article in Consumer Affairs explains, while many Americans decide not to purchase life insurance (some simply because they do not recognize its value), a life insurance policy “can provide financial help to your family by covering final expenses in the event of a death.” Life insurance is extremely important for any family to consider regardless of the family size, but as that article points out, “many people are underinsured or have the wrong policy, especially women who are the primary breadwinners for their family.” As you may already know, there are a number of different life insurance options that can be particularly valuable for seniors, although no single insurance policy can be best for all persons in a specific age group.
What should you know when choosing a life insurance policy? First, we will discuss tips for choosing a life insurance company. Then we will discuss life insurance policy options.
How Should I Choose My Life Insurance Company?
When you are deciding between and among different types of life insurance policies, how can you know which is best to suit your individual needs? There are many different kinds of life insurance products, and as you age, your specific life insurance needs probably will shift. As such, from the start, you should be sure to consider the following issues:
What Life Insurance Options Are Available?
What are some of the different policy options you can choose? The following are examples of a wide variety of insurance products:
Contact a West Michigan Estate Planning Attorney
If you have questions about life insurance policies and the options that are best for you, do not hesitate to speak with an experienced Michigan family trust lawyer. An advocate at our firm can speak with you today. Contact the Law Offices of David L. Carrier, P.C. to learn more.
Burial Benefits for Veterans
Blog, Estate PlanningLosing a loved one is difficult under any circumstances, and it can be challenging to think about financial issues when you are coming to terms with the death emotionally. Yet it is important for families of veterans to know about burial veterans for benefits and some of the services they may be eligible for after losing a loved one. Even if the death is not service-related, the U.S. Department of Veterans Affairs still provides benefits for families of former service members provided that certain conditions are met. What else do you need to know about burial benefits for veterans and how this matter relates to estate planning in Michigan?
Simplification of Veterans’ Burial Benefits from the U.S. Department of Veterans Affairs
According to a news release from the U.S. Department of Veterans Affairs, changes to burial benefits went into effect in July 2014, and those changes were aimed at “simplify[ing] the program and pay[ing] eligible survivors more quickly.” With those new regulations, the VA was permitted to pay a flat rate for burial, plot, or interment allowances. In brief, the VA recently changed its regulations to make the process of obtaining burial benefits for veterans more streamlined.
To make clear the specific types of burial benefits for which veterans can be eligible, the VA provides a fact sheet that clarifies who is eligible and the amount that can be paid out.
Who is Eligible for Burial Benefits?
Typically, as the fact sheet explains, an eligible surviving spouse will be paid automatically when the VA is notified of a veteran’s death, and that eligible spouse will not need to submit a claim. Generally speaking, however, is a surviving spouse has not been paid automatically, then the first living person among the following that files a claim will be paid:
Amount of VA Benefits for Veterans
The amount that the VA will pay in burial benefits for a veteran depends upon whether the death was a service-connected death or a non-service-connected death. First, we can explain the benefits for a service-connected death. What does service-connected mean? In brief, the death must have occurred during active military service. If the veteran’s death occurred on or after September 11, 2001, then the burial allowance from the VA is $2,000. For deaths that occurred before September 11, 2001, the burial allowance is $1,500. A survivor can also be eligible to receive some form of reimbursement for transporting the remains of the veteran if the veteran is buried in a VA national cemetery.
How much can the VA pay in burial benefits for a non-service-connected death? The answer to this question depends on a number of different factors, including the date of death and whether the veteran was receiving care from a VA hospital at the time of death. For veterans not hospitalized in a VA hospital at the time of death, the amount of the burial benefits depends largely on the date of death. The available benefits are as follows:
If the non-service-connected death occurred while the veteran was hospitalized by the VA, then the burial allowances go up to the same amount as the plot allowance. As such, for a death that occurred on or after October 1, 2016, the VA will pay a burial allowance of $749, along with $749 for the plot.
Contact a Grand Rapids Estate Planning Lawyer
If you have questions about burial benefits for veterans, an experienced Portage probate lawyer can assist you. Contact the Law Offices of David L. Carrier, P.C. today.
How Trump’s Election Can Affect Your Estate Planning
Blog, Estate PlanningWith Donald Trump’s election and pending inauguration, many Michigan residents may be wondering about how some of the laws and regulations that Trump wants to put in place may affect your estate plan. What do some of these plans entail? And how can you prepare for these changes? In short, for the wealthy, Trump’s promise to repeal the estate tax may impact tax-related estate-planning measures for the very small percentage of the wealthy for whom the current estate tax has an impact. However, when we consider estate-planning measures concerning nursing home care, and the use of Medicare and Medicaid, many seniors may have reason to be concerned. According to a recent article in Forbes, “the election of Donald Trump, along with continued Republican majorities in the House and Senate, will likely result in major cuts in federal programs that benefit older adults and younger people with disabilities.”
Estate Planning, the Estate Tax, and Middle-Class Americans
As a recent article in the Wall Street Journal explains, Trump’s plan for estate-tax repeal, if it happens, “will give a tax cut to the very wealthiest millionaires and billionaires,” given that the current exemption is $5.45 million per person, or $10.9 million (double the individual exemption) per married couple. Most Michigan residents simply will not be impacted by the estate tax one way or another, and instead are thinking more about how they will be able to afford nursing home care and other medical treatments under the Trump administration.
If Trump’s plans with regard to the estate tax, or taxable gifts, may impact you, it is important to speak with a lawyer about creating a will regardless of how Congress will take action under Trump, and to avoid taxable gifts. But more importantly for a larger number of Americans, what might the Trump administration mean for Medicare, Medicaid, and nursing home costs?
Understanding Federal Funding for America’s Seniors
As a report from MarketWatch explains, one of Trump’s key promises has been to cut federal spending. But who will this impact most? As the report clarifies, “the biggest chunk of the budget, by far, goes to Americans who are over 65 years old.” To be sure, “in fiscal 2017, Social Security and Medicare alone will cost $1.7 billion.” Moreover, “just over a fifth of all Medicaid also goes to the over-65s—for example on nursing home costs for those who have run out of assets.”
In order to be eligible for Medicaid benefits, an elderly person must use up most of their assets in order to qualify. Given that nursing home care is so expensive, it is usually not difficult for many seniors to be eligible for Medicaid benefits for nursing home care costs. According to a fact sheet from Genworth, the median annual cost of care in an assisted-living facility in Grand Rapids is $45,450. For a semi-private room in a nursing home in Grand Rapids, the median annual rate is $93,075. And the cost of a private room in a Grand Rapids nursing home is even higher. To be sure, the fact sheet cites the median annual rate from 2015 as $101,105.
As the Forbes article explains, it is not yet clear whether—and to what extent—the Trump administration will make cuts to Medicare and Medicaid, both programs that help seniors. In the meantime, family members may need to consider financial planning to help pay for care for elderly loved ones. And it is not too late to look into long-term-care insurance options that may be able to help cover costs in the future.
Discuss Your Options with a Grand Rapids Estate Planning Lawyer
If you have questions about how Trump’s election can affect your estate planning, it is important to speak with a Norton Shores estate planning attorney as soon as possible. Contact the Law Offices of David L. Carrier, P.C. to discuss your options.
Pensions and Estate Planning
Blog, Estate PlanningFor residents of Grand Rapids, Michigan who are thinking about estate planning and, in particular, are thinking about options concerning their pensions, it is important to understand how estate planning is connection to decisions about your pension. First, what is a pension? Is this something you need to add into your will? And can you have more than one beneficiary for your pension? These are some of the common questions we receive, and we will discuss these and more as we explain how pensions can figure into your estate planning.
What is a Pension?
In order to understand how your pension will play a role in your estate planning, you will first need to know what a pension is and how it functions. As CNN Money explains, a pension is simply a “retirement account that an employer maintains to give you a fixed payout when you retire.” A pension is what is known as a defined benefit plan. A defined benefit plan is simply one in which the benefit you received is based on how long you have worked for your employer and your salary. This is also a plan into which your employer pays the money (and makes decisions about where it will be invested).
How much is a pension worth and how does a pension get paid? The answers to those questions will depend upon a number of factors, including the length of time you worked for your employer, as well as your salary during your period of employment. A pension pays out when you decide to retire, and it will typically be paid either in a monthly payment over a period of time, or it can be paid in a lump-sum payment.
Learning More About Your Pension and Estate Planning
Now that you understand more about pensions (and, perhaps, how they are distinct from other types of retirement accounts such as IRAs, for example), it is important to learn more about designating beneficiaries and ensuring that your retirement benefits can help to provide for your loved ones.
A trusts and estates resource sheet from the American Bar Association helps to explain how you name beneficiaries on a pension plan, and other issues to consider. First, it is important to know that you do not name beneficiaries of your pension plan account in your will. While items that you bequeath in your will must go through the probate process, retirement benefits and other insurance payouts will not automatically have to go through the probate process. Now, how do you name a beneficiary on your pension plan if not through your will?
Pension plan accounts are a bit different than other retirement accounts when it comes to naming beneficiaries. While certain retirement accounts allow you to choose your beneficiary and to name that specific beneficiary in writing, pension plans require your spouse to be the named beneficiary—if you are married—unless the spouse expressly waives this benefit in writing. While in most cases your spouse will be the person you would choose as the beneficiary regardless, pension plans to assume that the spouse will benefit from this account in the event of your death. If you are not married, you can name anyone you choose as the beneficiary of your pension plan, and that person then may be able to receive lifetime payments through your pension.
A West Michigan Estate Planning Attorney Can Help
Whether you are married or not, it is important to discuss any estate-planning questions, including naming beneficiaries on your retirement accounts, with an experienced Grand Rapids estate planning attorney. An advocate at our firm can answer your questions today. Contact the Law Offices of David L. Carrier, P.C. to learn more about our services.
What Happens to Assets Not Included in Your Trust?
Blog, Estate PlanningMany people create a will or a trust prior to their death, both of which can be used to leave assets and property to beneficiaries upon the creator’s death. While most people have the foresight to include all of their property within a trust or a will, it is not uncommon for certain assets to be left out, either intentionally or accidentally. The following considers what happens to assets that are not included in your trust–
Assets Not Held Within a Trust Must Go Through Probate
Assets that are not held within a trust must go through probate. This is the process of identifying and inventorying a person’s assets (that are not held within a trust), and proving that a will is valid (if a will exists). If the will is found to be valid, then all assets found in the will be be distributed to beneficiaries per the terms of the will. In some cases, a will may stipulate that any assets not expressly stated should go to a certain beneficiary. In other cases, there is no such provision as this, and any assets not held in a trust or addressed in a will must be divided per state law.
Michigan Intestacy Laws
The laws in Michigan that govern how assets are to be distributed if they are not otherwise accounted for are called intestacy laws. If a person died without assets in a trust, or without a will, their assets (or the assets not named in a will) will go to their children and their spouse, and in some cases parents or siblings.
Contesting a Will or Distribution of Assets
The descendants of a person who has died without placing all of their assets in a trust may take issue with the validity of the decedent’s will, or with distribution of assets per the state’s intestacy laws. If you have questions about contesting a will or distribution of assets, or want to learn more about what happens to assets that are not placed in a trust prior to death, it is beneficial to work with an experienced Michigan wills and trusts attorney.
At The Law Offices of David L. Carrier, P.C., our talented Holland family trust attorneys will answer all of your questions, can help you to form a will or a trust, and can advise you of your rights and options after the death of a loved one. If you need to contest the distribution of certain assets, we can help.
Schedule your free case consultation by calling our law offices today or contacting us online.
What Happens to Your Michigan Business After You Die?
Blog, Estate PlanningFor business owners in Michigan, planning for their business’ future after their death is an important consideration. This article will consider what happens to a Michigan business after its owner’s death, the process of transferring a business, what happens when a business is not transferred to someone, and how an experienced estate planning attorney can aid throughout the process.
Transferring Ownership of a Business Upon Death
It is possible to transfer the ownership of a business to your heirs, or a trusted person or set of people, upon your death. One of the best ways to do this is to put your business in a trust. Transferring your business property to your living trust is a great idea, and is very simple to do (especially if your business is a sole proprietorship). If there are multiple owners, such as an LLC, you will need consent from other owners prior to putting your business interests into a trust.
You can also leave your business in a will, although items in a will do need to pass through probate, the process of which can be tedious and could tie up business operations.
What Happens When a Business is Not Planned for
When a business and its property and assets are not planned for and are not placed in a trust or named in a will, what will happen to the business depends upon the type of business structure. For example, a business that is formed as a sole proprietorship will simply become part of the owner’s (decedent’s) estate, and will be distributed to beneficiaries per the terms of a will or per state law. If a business is not solely owned, such as a corporation, the business will not die when the business owner dies. Instead, the owner’s estate becomes the owner of the decedent’s shares.
How an Experienced Grand Rapids Estate Planning Attorney Can Help
Each state has its own laws regarding property distribution upon death, and each type of business must be planned for differently. If you have any business interests in Michigan, it is best that you plan for what will become of these interests now while you are healthy and well; waiting too long could be catastrophic, and if you fail to create a plan at all, your business may be dissolved, and your heirs may be left with nothing.
At The Law Offices of David L. Carrier, P.C., we understand what it takes to protect your business and your loved ones. To schedule a free case consultation to learn about our business and estate planning legal services in Michigan, contact us online today. You can also call our offices directly.
How to Protect Your Assets in Michigan
Blog, Estate PlanningAsset protection is an important consideration for many individuals, particularly high net worth individuals and owners of businesses. However, asset protection is not limited to the wealthy alone; asset protection can be used for myriad things, including protecting your assets from any future lawsuits, ensuring that your assets are distributed quickly to your loved ones and beneficiaries upon your death, avoiding taxes and probate, planning for long-term care to reduce asset expenditures, and more. If you live in Michigan, here are some ways that you can protect your assets. Before moving forward with any of the following suggestions, be sure to consult with an experienced attorney:
Create a Separate Business Entity
If you are the owner of the business or are considering the formation of a business, you want to be sure that your business structure is one that separates your personal liability from your business’ liability. If liability is not separated, then a mistake on the part of your business could cost you everything, including money in separate accounts, your house, your vehicle, and more.
Take Advantage of Retirement Accounts
One of the best things about retirement accounts is that they offer asset protection, including up to one million dollars in assets in an IRA in the event of bankruptcy, and unlimited asset protection in ERISA-qualified retirement plans.
Create an Estate Plan
Having an estate plan does more than just protect your assets from intestate succession laws upon your death; it can also help to mitigate estate taxes, saving your estate money. Having an estate plan also gives you peace of mind when it comes to ensuring that your loved ones are cared for after you’re gone.
Use Insurance
Owning insurance may not be the only way to protect your assets, but it is one of the wisest. Consider the following types of insurance, and seek those which are applicable to you:
Understand Homestead Exemptions
A homestead exemption protects the equity in your home, meaning that creditors cannot claim the equity if you need to declare bankruptcy. The exemption applies to all real property. You can read more about the homestead exemption in Michigan statute section 600.6023.
Protect Your Assets – Work with an Experienced Norton Shores Elder Law Attorney
Taking action as soon as possible to put in place an asset protection plan is smart, and may have a huge impact on your future or the future of your loved ones. For help forming an estate plan that protects your assets and provides for those you care about the most, contact The Law Offices of David L. Carrier, P.C. You can reach our talented Michigan estate planning attorneys online or by phone today.
How to Plan for a Medicaid Crisis
Blog, MedicaidNobody wants to face a Medicaid crisis in which an elderly loved one unexpectedly requires expensive, long-term care but is ineligible for government assistance. However, all too often, residents of Grand Rapids suddenly require nursing home care and are told that they have too many assets and thus cannot qualify for Medicaid. As a fact sheet from the U.S. Department of Health and Human Services (HHS) explains, Medicaid provides free or low-cost healthcare for a variety of different people, including the elderly.
When a Medicaid crisis happens, however, patients in need of immediate care may be forced to sell or liquidate assets if they are ineligible for Medicaid assistance. As an article from AARP makes clear, the average cost for a private room in a nursing home in 2016 was more than $92,000. Even if you decide to stay at home and pay for an in-home health aide, the cost still averages more than $46,000. The ultimate goal for families should be avoiding this kind of Medicaid crisis. While Medicaid crises do happen much too often, the good news is that it is possible to take steps to prevent this from happening.
From thinking about long-term care insurance to understanding Medicaid eligibility, you can be ready for a medical crisis. An experienced Michigan elder law attorney can assist you.
When Should I Start Preparing for the Possibility of a Medicaid Crisis?
Many Michigan residents want to know when they should start planning for the possibility of a Medicaid crisis. Although many older adults may need Medicaid to pay for nursing home care, particularly given the high costs associated with many facilities, the difficulty of the Medicaid process can be minimized with some early planning. To be sure, when you plan ahead of time, you can protect certain assets, and at the same time you take steps to help ensure that you will be able to receive quality care.
As we mentioned above, the best time to begin planning is while you are still healthy and do not need long-term care. Generally speaking, we refer to this as “Medicaid pre-planning.” When you engage in Medicaid pre-planning, you can take steps to protect valuable assets from being used to pay for nursing home costs and to safeguard your eligibility for Medicaid assistance.
While it is best to begin planning before you become ill, it is still possible to work with an experienced elder law attorney on Medicaid crisis planning. You should not have to use all of your hard-earned savings to pay for a stay in a nursing home. You may still be able to protect your property.
Different Steps You Can Take to Plan for Long-Term Care in a Nursing Home
What steps can you take to plan for long-term care in a nursing home? The following are some important tips that can help to minimize the financial impact of nursing home expenses:
Contact a Michigan Medicaid Crisis Attorney
If you have questions about determining your Medicaid eligibility or planning for a Medicaid crisis, an experienced Holland elder law attorney can help. Contact the Law Offices of David L. Carrier, P.C. today for more information.
When Should You Get Life Insurance?
Blog, Estate PlanningAlmost inevitably, there are final expenses to pay and accounts to settle when a loved one dies. So, life insurance is an integral part of an estate plan, because it gives the personal representative funds to deal with these items. Certain kinds of life insurance benefits the purchasers during their lifetimes as well, because they build equity that can be tapped or borrowed against.
Quite frankly, there is little need for life insurance if one does not have assets and/or dependents to protect. So, many people purchase insurance when they buy homes, get married, or have children. Since these events tend to happen rather early in life, most people buy insurance in their 20s or 30s. That is a good thing, because as we age, premiums increase along with the likelihood of disqualifying health conditions.
Considerations When Buying Insurance
The old rule of thumb is that people should have ten times their annual income in life insurance. This rule obviously does not apply in all situations, especially if there is a stay-at-home parent in the house. Another shorthand rule is the 10-plus-100,000 formula: ten times annual income plus an additional $100,000 for children’s college expenses. A better rule, although it is still imperfect, is the DIME (Debt, Income, Mortgage, and Education) method. This exercise requires a bit more work, but by considering all four items that life insurance is supposed to protect, one may have a better idea how much coverage to purchase.
Another rule of thumb is to reconsider the amount of insurance every three or four years, because financial and family circumstances can change drastically in that amount of time.
Types of Insurance
The most basic type of insurance is term life. It pays a death benefit if the policyholder dies within the term, which is normally thirty years. Typically, the death payment is the only available benefit. Over 90 percent of such policies are level term life policies, which means that the premiums remain the same throughout the term. To accomplish this, the insurance company overcharges younger policyholders and these overpayments essentially subsidize the premium payments as the policyholders age. This extra money is how the policy builds a cash value. In decreasing term life insurance, the death benefit drops over time to compensate for the fact that the company makes less money in the later years of the term.
As the name implies, whole life insurance lasts for the policyholders’ whole lives, regardless of how long they live. There are three basic categories:
Some companies also sell universal/variable policies that combine aspects of both vehicles.
Rely on Experienced Estate Planning Attorneys
Pre-estate planning, including life insurance, may be as important as estate planning. For a free consultation with an experienced estate planning attorney, contact Carrier Law.