A Way to Equalize Inheritances
Most parents want their children to share equally in their estates. But what can parents do to equalize inheritances when they expect only one of their children to take over the family business?
It’s not an unusual scenario. It often happens that one child wants to work in — and eventually run — the business, while the other children are more interested in pursuing different careers.
Buying a life insurance policy can be a solution for parents who want to ensure that all of their children are treated equally in their estate plan. Very generally, one parent would buy a policy with a large enough death benefit to make up for the likely market value of the property the parents wish to leave to one child. By naming their other children as beneficiaries of a life insurance policy that has the appropriate death benefit, parents can ensure that all of their children will receive approximately equal inheritances.
Life insurance can be also used to equalize inheritances if there is a farm, family home, or vacation property that parents wish to leave to one child.
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