Planning strategies
Estate & Wealth-Transfer Liquidity
When most of the net worth is in an operating business, real estate, or another illiquid asset, a transfer of wealth can force the sale of the very thing the family wanted to keep. Life insurance is often the most efficient way to supply the cash instead.
Who this is for
Families whose wealth is concentrated and illiquid
Business owners and real-estate families. Estates large enough to owe federal or state transfer tax, now or under a lower future exemption. Families that want active heirs to keep the business and inactive heirs to be treated fairly — without a forced sale to make the math work.
The problem
Nine months, and a bill
Federal estate tax is generally due nine months after death, in cash. An estate concentrated in a business or property does not have that cash, and the alternatives — a rushed sale, a loan against the asset, an installment election with interest — each cost the family value at the worst possible time.
What we do
Supply the liquidity, outside the estate
- Work with your attorney and CPA to project the settlement cost — taxes, debts, administration, and any equalization goal.
- Design life insurance sized to that need, typically owned by an irrevocable life insurance trust (ILIT) so the proceeds fall outside the taxable estate.
- Structure the premium funding — annual exclusion gifts, lifetime exemption, or a private financing arrangement — and the Crummey mechanics, in coordination with counsel.
- Use wealth-replacement coverage to offset assets directed to charity, and inheritance-equalization coverage so not every heir has to receive a piece of the business.
- Review annually as the estate, the exemption, and the trust’s policy all change.
We work alongside your estate attorney, not in place of one. The trust and the tax analysis are theirs; the coverage inside the trust is ours.
The goal is simple to state: the family keeps the asset that made them, and the tax is paid with dollars that were set aside for exactly that.
Related protections and strategies