Using Life Insurance for Special Bequests
A specific bequest is when an individual identifies in their will which item or asset they want to leave to each beneficiary. This could include jewelry, art, money, real estate, and other tangible items. It also includes intangible items such as patents, royalties, copyrights, and even digital assets such as domain names or social media accounts.
What Is a Specific Bequest?
If you have three children, you can specify which item or asset goes to which one of them by using the language of “specific bequests” in your will or trust document. This allows for clarity and avoids any potential confusion about who receives what after you are gone.
Clarity Prevents Family Conflict
Where Life Insurance Comes In
Life insurance can be a welcomed part of specific bequests in situations where not every child or grandchild can receive an item specifically given to them. For example:
- One child receives the family home; the others each receive a life insurance death benefit of equivalent value
- One child receives the family business; others receive life insurance to equalize the inheritance
- Grandchildren who aren’t receiving specific heirlooms receive life insurance proceeds instead
Equalize Without Liquidating
Planning specific bequests takes thoughtfulness and coordination. Start with a clear picture of your assets, then determine how life insurance can help you create a fair, meaningful distribution for every person you care about.
