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Your Final Expenses Expenses incurred at the time of a person's death. These include, funeral costs, court expenses associated with probating his or her will, current bills or debt, and taxes. There is a long list of expenses associated with death. In addition to the taxes on your assets, there are funeral expenses, probate fees, the cost of legal and accounting services that may be needed to deal with your estate's financial affairs, plus hefty additional expenses if the death occurs out of town. Even your executor is legally entitled to compensation. To make matters worse, your assets may be frozen until your estate is settled. Meanwhile, your family has to come up with the money to pay those final expenses while still covering all of its day-to-day living expenses. With life insurance, your family will be able to meet its financial obligations. And that is one less thing to worry about. A good estate plan will minimize the tax burden and other expenses your heirs may face that could seriously deplete their inheritance or put them in a “cash crunch.” By creating a readily available fund of liquid assets, you can put their minds at ease and avoid forced asset sales that can wreck an otherwise solid estate plan. The key word here is liquidity; cash demands are a frequently overlooked reality of estate administration. Purchasing life insurance is a common and cost-effective way to provide funds to meet these demands. In many cases, the insurance company will pay off within a couple of weeks following the insured’s death -- ample time to pay loans or taxes. Depending on the structure of the estate plan, some proceeds may be free from federal income and estate tax. But your question also raises issues about needs for money immediately upon death, such as funeral expenses. Today, most funeral homes accept credit cards, which will give your heirs time to use insurance proceeds for these expenses. However, you may also choose to put aside cash or money market funds for use at your death, or make your own funeral arrangements while you are alive. For longer term cash needs (such as estate taxes and support for surviving family members), a gift in your will to a charitable institution can provide unique and useful benefits. A charitable bequest reduces the size of your estate and any applicable estate taxes. There are many variations of charitable gifts that provide a lifetime income for your surviving spouse and/or children, ensure substantial tax savings, and benefit a cause you care about. The best course is to seek professional advice to develop an estate plan unique to your individual needs and ideals.
Funeral Costs Probate Costs Estate Taxes Medical
Expenses Don Pirtle
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