Using Life Insurance to Create an Asset for Inactive Children
Jul 20, 2010
From Legacy Moment eNewsletter (July 16, 2010).
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Jake owns a successful agribusiness. His son Chad has been involved in the operation since college. The operation is worth $4 million, and it represents significantly all of Jake’s assets. His other son, Clayton, is not involved in the operation.
To make an equitable distribution to both his children, Jake purchases a $2 million life insurance policy and names Clayton as beneficiary. Though this is not an equal distribution, Jake rationalizes that a $4 million operation, like any business, is risky. It is fraught with opportunities and obligations, duties and responsibilities.
Would you make a similar insurance purchase? Check out our Life Insurance Needs Analysis to help you plan for the contingencies that may affect the financial health of your business.