You can do a lot for your heirs with life insurance. A whole life insurance policy is a form of what’s known as permanent life insurance and will accumulate cash value, money that you can use during your lifetime. It also guarantees a certain amount of money will be left to your heirs. You can transfer your whole life insurance policy, with its cash value, into a trust, which creates tax advantages for your chosen beneficiaries. You can also gift money tax-free to pay for a whole life insurance policy for a beneficiary, to ensure they’re financially secure when you’re gone. When your beneficiary is an adult, he or she can take over paying for the whole life policy to grow their cash value asset and create a legacy of their own.
Update your records every few years, and let your heirs know how to locate them. Most estate attorneys will advise you to check back with them every few years, if not annually. This is because family dynamics can change, as can federal and state laws, affecting the way you leave gifts or decide upon beneficiaries. Record current account numbers, life insurance statements, financial assets, safety deposit boxes (remember to include both the box number and the address of the financial institution), and your electronic passwords in one secure place. Make sure your trustees know each other’s contact information, and also where your essential information is held.