How to be Fair when Equalizing an Inheritance?
The Estate Equalization client presentation is now available through Simplify, a powerful, case design presentation tool brought to you by MassMutual Strategic Distributors (MMSD) Advanced Sales.
Concern:
- Owners of a closely held business want to decide on a fair division of inheritance assets among children, especially if it is successful and the primary asset.
- If the intention is to have the business continue as a legacy for children who are working in the business, liquidating it to divide up the family wealth equally among them is an extreme option — and this happens.
- It is also challenging to equalize an inheritance for children not involved in the business when liquid assets are sparse.
- Ultimately, business owners are concerned about disagreements that can occur among family members if decisions to create liquidity aren’t settled before they are deceased.
Solution: More and more Business owners are considering Whole Life Insurance as a solution. But what amount is fair? Should an equal amount passing to children working in the business be insured? The downside to this is that the insurance amount required can become cash-flow prohibitive. What about introducing a fair solution instead of an equal one to business owners? And explain how the cash accumulation of a whole life insurance policy can help them supplement their retirement income?*
Results: MassMutual’s new Simplify presentation on Estate Equalization helps illustrate how business owners can use a whole life insurance policy as a financial asset and to create a fair inheritance.
*Access to cash values through borrowing or partial surrenders will reduce the policy’s cash value and death benefit, increase the chance the policy will lapse, and may result in a tax liability if the policy terminates before the death of the insured.