Policies and Successions

Policies and Successions
Life insurance plays an important role in succession planning. In fact, the inheritance itself may become the beneficiary of a life policy. This makes it easier to use insurance benefits to cover the costs and taxes associated with the succession process upon death of the policy-holder. In addition, a policy provides beneficiaries with assets, and it is tax exempt, which undoubtedly contributes to preserving the integrity of the estate.
Children and Succession Planning
Children are often the primary beneficiaries of an estate. When children are 18 or older at the time of death of the estate holder (parent), succession should occur without major complications. However, if they are minors, several factors must be considered.
In some cases, the surviving parent will be the primary beneficiary and the person in charge for the children. The estate owner will have to establish an administrative process in cases where children are minors. If the asset holder fails to do so, a judge may appoint a guardian to manage the assets inherited by a minor.

To avoid the latter, the owner may establish:
  • A trust fund for his/her children. The trustee will administer the estate until the beneficiaries reach a certain age, as set forth in the trust fund.
  • Name a personal guardian in the will. Of course, the guardian must be someone completely trustworthy who will receive legal power from the owner to make decisions in the best interest of the beneficiaries.