- How guaranteed universal life ensures proper estate planning
- December 16, 2013
If you want to ensure that your estate reverts to your heirs instead of the IRS, consider purchasing a guaranteed universal life survivor plan. GULS is a special type of insurance, sometimes called “second-to-die life insurance,” designed to provide funds after the second insured dies. It also can provide some flexible opportunities during the coverage period.
According to Mutual of Omaha Vice President Andy Hutchison, under current federal law there is no estate tax on assets left to a spouse who is a U.S. citizen, but the estate tax kicks in after the second insured dies and the assets are left to children or others.
“Far and away, the most common use for survivor life insurance is to pay the federal estate tax,” said Hutchison. “That reason alone probably constitutes at least 90 percent of the cases we see.”
Uses for Guaranteed:
-Fund buy-sell agreements for businesses to buy the company when the last surviving owner dies.
-Provide a special needs trust for a couple with a special needs child to provide support after the parents die. The GULS policy can name a “special needs trust” as the beneficiary without disqualifying the child from state aid or SSI.
-Cover estate settlement costs when they are typically the highest, after the second death.
-Preserve charitable gifts efficiently and economically without impacting the estate plan.
If you are considering guaranteed universal life, this type of coverage can be more costly that term insurance. However, insurance rates are at an all time low so please call your insurance agent today.
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