Estate Planning

Checking off the
peace-of-mind box

Generally, estate taxes (death taxes) are owed upon the passing of the second spouse. This makes second-to-die/survivorship/joint life policies ideally timed as it pays out precisely when it is most needed. Even though families may have significant assets that they could use to cover estate taxes, it may not be the most optimal way to do so. For example, some of these assets may be rather illiquid such as certain real estate or closely held family businesses. If the second spouse passes away in a ‘2008-type’ year, the last thing we would want is a family be forced to sell off hard earned assets, even though it’s not a good time to say the least, to pay estate taxes2 and other estate settlement costs. The same can be said for stock market based investments: being forced to liquidate these to cover estate taxes is a consequence to try to avoid with important planning well in advance.