Estate Planning (Life Insurance Role)

Estate planning involves arranging the management and distribution of a person's assets during their lifetime and after death. Life insurance plays a central role in estate planning by providing immediate, income-tax-free liquidity at death — funding estate taxes, equalizing inheritances among heirs, paying final expenses, or transferring wealth efficiently. Strategies include using irrevocable life insurance trusts (ILITs) to remove proceeds from the taxable estate, buy-sell agreements funded with life insurance to transfer business interests, and second-to-die policies for married couples to address estate taxes upon the second spouse's death. Nevada's lack of a state estate or inheritance tax makes the federal estate tax the primary concern for high-net-worth residents.