Where one child inherits the family cottage or another asset of significant value such as a business, consider leaving equivalent cash assets to other siblings. If there will not be enough cash in the estate, life insurance can be purchased to create new tax-free money to divide up among siblings not inheriting a significant family asset. Also, life insurance benefits can be assigned to beneficiaries confidentially outside of the Will.
Capital gains taxation Taxes on significant capital gains can erode bequeathed assets such as a cottage, home, or business shares left to adult children which will affect the entire cash value of the estate. At death, such assets are deemed disposed of, where there is no spouse or dependent, in most cases creating taxable capital gains on the difference between the current asset value minus the purchase price. Life insurance can help pay capital gains taxes, for example, to keep a cottage or business in the family. Moreover, it leaves more money for the estate and equalisation among heirs.
Pay off debts If a lien on business or personal assets exists, a well-targeted life insurance benefit allows you to pay off all personal and business debts. Paid liabilities free up estate asset value transferring to the heirs.
Special provisions Life insurance can create income for dependents such as a spouse, children, and ageing parents who may need long-term care.