Law Office of Frank Bruno, Jr.

Author: dev-team

  • Busy People Need to Make Time for Retirement Planning

    Busy People Need to Make Time for Retirement Planning

    If you’re a busy mom or dad; are committed to long hours at work or have a successful career, maybe a real estate developer or a physician, you’re too busy to think about retirement. However, just like you had to prepare for your current position, you need to prepare for your life after you stop working, advises the article “Retirement planning for the busy professional” from the New Haven Register. What busy people often don’t realize, is that before they know it, retirement is around the corner.

    Making the transition to a successful, fulfilling retirement is not just about saving money, although that is an important factor. Here are a few tips to help you plan a great retirement:

    Use your imagination. What would you want your life to look like during retirement? How will you spend your days? Write down goals and be specific. If volunteering is something you don’t have time for now, would you want to become active in your community during retirement? What would that be—running a small organization or pitching in as part of a team? Do you plan on spending more time with your family? If so, what does that look like? Being very detailed will help you set goals and allow you to estimate your retirement expenses.

    Run the numbers. There are different scenarios that you can work through. For instance, if your idea of retirement is a schedule of non-stop travel, you can figure out what kind of trips you want to take—Elder Hostels or travelling first class—and what they’ll cost. If you already own a second home and plan to retire there, you have a good idea of what it costs to live in your second community. Consider investment returns, health care costs, taxes and life expectancy.

    Review your financial and legal plans. It is never too early to plan for the legal and financial aspects of your retirement. Anyone over age 18 should have an estate plan, both to protect you and your family in the case of death and incapacity. You should have a will, a power of attorney, health care proxy and possibly a trust. A financial plan will give you a roadmap. Are you saving enough? Are there opportunities you are missing? Do you have the correct insurance in place?

    Cut expenses and minimize debt. The less debt you have going into retirement, the better. Cutting expenses now will get you used to living within a tighter budget and controlling expenses. Write down your expenses to find out where the money is going. You will likely find some big surprises.

    Are your advisors right for you now, and will they be right for you in the future? If you’ve put up with an advisor who never returns your phone calls for a few years, is that the person you want to depend on when hard decisions need to be made about investments and retirement? Your team needs to include an estate planning attorney, a CPA and a financial advisor. Each of them should have a good working relationship with the other, and they should all be making you and your family a top priority.

    Reference:

    New Haven Register (Oct. 13, 2019) “Retirement planning for the busy professional”

  • Trouble sleeping? You might be getting too much of a good thing

    Trouble sleeping? You might be getting too much of a good thing

    You probably already know that a lack of sleep can make it hard to concentrate and make you irritable, but did you know how much sleep is ideal?

    Finding that perfect sweet spot between not enough sleep and too much sleep is important for all ages, particularly as we age. Studies have shown a link between sleep duration and the risk of dementia and other health conditions.

    Studies show that too much and too little sleep can affect your cognitive performance, including visual attention, memory, and how fast you can process thoughts. A lack of sleep can make it difficult to think clearly and make good decisions.

    An issue with oversleeping is that it can lead to health problems. For example, people who oversleep are more likely to suffer from obesity, heart disease, and diabetes.

    Due to all of these potential risks, it is vital to have an estate plan in place if something happens to you. Once your estate plan is in place, making your sleep a priority should be your next step to ensure your health and safety.

    Here are some tips for getting a better night’s sleep:

    • Don’t take too many naps – While it may be tempting to take a midday nap, that nap could wreck your ability to sleep later. According to the Sleep Foundation, the best time to do so is right after lunch if you are going to take a nap. They should only last 20 minutes, so they don’t disrupt your sleep pattern at bedtime.
    • Set a sleep schedule – If you wake up and go to sleep at different times each day, your body doesn’t get the opportunity to create a sleep routine. Try putting yourself on a schedule of going to bed at the same time every night and waking up at the same time each morning, even on the weekends.
    • Decrease your alcohol and caffeine intake at bedtime – While you may think a nightly cocktail helps lull you to sleep, the reality is that both alcohol and caffeine make sleep hard to come by. Experts say you should avoid caffeine and alcohol in the late afternoon and evening.
    • Create a calming environment – To help yourself relax and go to sleep, try creating a calming environment at bedtime. Engage in a quiet activity like listening to soft music, reading a book, or trying some gentle stretching for 30 minutes before bed. Turn the lights down and disconnect from laptops, televisions, tablets, and smartphones, which can keep your brain awake.

    By giving a few of these tips a try, you may get the perfect amount of sleep each night that your body craves and, in the process, become more mentally and physically healthy.

    It is important to note that most studies find that seven hours of sleep is the ideal amount of sleep. Those who experienced seven hours of sound sleep improved their cognitive performance and mental health.

    We specialize in educating and helping you protect what you have for the people you love the most. Contact us to learn more about how we can help.

  • What are Common Mistakes that People Make with Beneficiary Designations?

    What are Common Mistakes that People Make with Beneficiary Designations?

    “[In politics] when A goes after B and there’s a C, and D and a Q all lined up there, you have no idea who’s going to be the beneficiary.” Mark Shields

    “Nobody’s going to do your life for you. You have to do it yourself, whether you’re rich or poor, out of money or raking it in, the beneficiary of ridiculous fortune or terrible injustice. And you have to do it no matter what is true. No matter what is hard. No matter what unjust, sad, sucky things befall you. Self-pity is a dead-end road. You make the choice to drive down it. It’s up to you to decide to stay parked there or to turn around and drive out.” Cheryl Strayed

    Many people don’t understand that their will doesn’t control who inherits all of their assets when they pass away. Some of a person’s assets pass by beneficiary designation. That’s accomplished by completing a form with the company that holds the asset and naming who will inherit the asset, upon your death. It could be a bank account, financial institution or insurance company. A trust on the other hand only controls assets placed into the trust and your estate planning could be thwarted by beneficiary designations.

    Kiplinger’s recent article, “Beneficiary Designations: 5 Critical Mistakes to Avoid,” explains that assets including life insurance, annuities and retirement accounts (think 401(k)s, IRAs, 403bs and similar accounts) all pass by beneficiary designation. Many financial companies also let you name beneficiaries on non-retirement accounts, known as TOD (transfer on death) or POD (pay on death) accounts.

    Naming a beneficiary can be a good way to make certain your family will get assets directly. However, these beneficiary designations can also cause a host of problems. Make sure that your beneficiary designations are properly completed and given to the financial company, because mistakes can be costly. The article looks at five critical mistakes to avoid when dealing with your beneficiary designations:

    Failing to name a beneficiary. Many people never name a beneficiary for retirement accounts or life insurance. If you don’t name a beneficiary for life insurance or retirement accounts, the financial company has it owns rules about where the assets will go after you die. For life insurance, the proceeds will usually be paid to your estate. For retirement benefits, if you’re married, your spouse will most likely get the assets. If you’re single, the retirement account will likely be paid to your estate, which has negative tax ramifications. When an estate is the beneficiary of a retirement account, the assets must be paid out of the retirement account within five years of death. This means an acceleration of the deferred income tax—which must be paid earlier, than would have otherwise been necessary.

    Failing to consider special circumstances. Not every person should receive an asset directly. These are people like minors, those with specials needs, or people who can’t manage assets or who have creditor issues. Minor children aren’t legally competent, so they can’t claim the assets. A court-appointed conservator or guardian will claim and manage the money, until the minor turns 18. Those with special needs who get assets directly, will lose government benefits because once they receive the inheritance directly, they’ll own too many assets to qualify. People with financial issues or creditor problems can lose the asset through mismanagement or debts. Ask your attorney about creating a trust to be named as the beneficiary.

    Designating the wrong beneficiary. Sometimes a person will complete beneficiary designation forms incorrectly. For example, there can be multiple people in a family with similar names, and the beneficiary designation form may not be specific. People also change their names in marriage or divorce. Assets owners can also assume a person’s legal name that can later be incorrect. These mistakes can result in delays in payouts, and in a worst-case scenario of two people with similar names, can mean litigation.

    Failing to update your beneficiaries. Since there are life changes, make sure your beneficiary designations are updated on a regular basis.

    Failing to review beneficiary designations with your attorney. Beneficiary designations are part of your overall financial and estate plan. Speak with your estate planning attorney to determine the best approach for your specific situation.

    Beneficiary designations are designed to make certain that you have the final say over who will get your assets when you die. Take the time to carefully and correctly choose your beneficiaries and periodically review those choices and make the necessary updates to stay in control of your money.

    Related Articles:

    Using Trusts to Maintain Control of Inheritances

  • Estate Plan for Blended Family

    Estate Plan for Blended Family

    Estate Plan for Blended Family. There are several things that blended families need to consider when updating their estate plans, says The University Herald in the article “The Challenges and Complexities of Estate Planning for Blended Families.”

    Estate plans should be reviewed and updated, whenever there’s a major life event, like a divorce, marriage or the birth or adoption of a child. If you don’t do this, it can lead to disastrous consequences after your death, like giving all your assets to an ex-spouse.

    If you have children from previous marriages, make sure they inherit the assets you desire after your death. When new spouses are named as sole beneficiaries on retirement accounts, life insurance policies, and other accounts, they aren’t legally required to share any assets with the children.

    Take time to review and update your estate plan. It will save you and your family a lot of stress in the future.

    Your estate planning attorney can help you with this process.

    You may need more than a simple will to protect your biological children’s ability to inherit. If you draft a will that leaves everything to your new spouse, he or she can cut out the children from your previous marriage altogether. Ask your attorney about a trust for those children. There are many options.

    You can create a trust that will leave assets to your new spouse during his or her lifetime, and then pass those assets to your children, upon your spouse’s death. This is known as an AB trust. There is also a trust known as an ABC trust. Various assets are allocated to each trust, and while this type of trust can be a little complicated, the trusts will ensure that wishes are met, and everyone inherits as you want.

    Be sure you that select your trustee wisely. It’s not uncommon to have tension between your spouse and your children. The trustee may need to serve as a referee between them, so name a person who will carry out your wishes as intended and who respects both your children and your spouse.

    Another option is to simply leave assets to your biological children upon your death. The only problem here, is if your spouse is depending upon you to provide a means of support after you have passed.

    An experienced estate planning attorney will be able to help you map out a plan so that no one is left behind. The earlier in your second (or subsequent) married life you start this process, the better.

    Reference:

    University Herald (June 29, 2019) “The Challenges and Complexities of Estate Planning for Blended Families”

  • Why You—and Everyone—Needs an Estate Plan

    Why You—and Everyone—Needs an Estate Plan

    At its essence, estate planning is any decision you make concerning your property if you die, or if you become incapacitated. There are a number of things to keep in mind when creating an estate plan, says KTUU in the article “Estate planning dos and don’ts.”

    The first task is not what most people think. It’s very basic: making a list of all of your assets and how they are titled. Remember, the estate plan is dealing with the distribution of your assets—so you have to first know what those assets are. If you are old enough to have lived through the sale of several different financial institutions, do you know where your accounts are? Not everyone does!

    Next, you need to be clear on how the assets are titled. If they are joint with a spouse, Payable on Death (POD) or Transfer on Death (TOD), jointly with a child, or owned by a trust, they may be treated differently in your estate plan, than if you owned them outright.

    Roughly fifty percent of all adults don’t make a plan for their estate. That becomes a huge headache for their loved ones. If you don’t have an estate plan, your property will be distributed according to the laws of your state. What you do or don’t want to have happen to your property won’t matter, and in some instances, your family may be passed over for a long-lost sibling. It’s a risk.

    In addition, if you don’t have an estate plan, chances are you haven’t done any tax planning. Some states have inheritance taxes, others have estate taxes, and some have both. Even if your estate’s value doesn’t come anywhere close to the very high federal estate tax level ($11.4 million per person for 2019), your heirs could inherit far less, if state and inheritance taxes take a bite out of the assets.

    For a blended family, there are a number of rules in different states that divide your assets. In Alaska, for instance, if some of the children of one spouse are not the children of the other spouse, there is a statutory formula that depends on how many children there are and which of them are living. Different percentages of money are awarded to the children, which becomes complicated.

    Why You—and Everyone—Needs an Estate Plan. Another reason to have an estate plan has to do with incapacity. This is perhaps harder to discuss than death for some families. Estate planning includes preparing for what the individual would want to happen, if they were injured or too sick to convey their wishes to others. Decisions about health care treatments and end-of-life care are documented with a Living Will (sometimes called an Advanced Care Directive), so your loved ones are not left wondering what you would have wanted and hoping that they got it right.

    One last point about an estate plan: be sure to check beneficiary designations while you are doing your estate plan. If you own retirement accounts, life insurance policies, or other assets with named beneficiaries, the assets will pass directly to the named beneficiary, regardless of the instructions in your will. If you opened an IRA when you had one child and have had other children since then, make sure to include all of those children and the proportion of their shares. There may be tax implications, if only one child receives the assets, and there may also be family fights if assets are not distributed equally.

    Reference:

    KTUU (August 14, 2019) “Estate planning dos and don’ts”

  • Blended Families Need More Thoughtful Estate Plans

    Blended Families Need More Thoughtful Estate Plans

    Estate planning for blended families is like playing chess in three dimensions: even those who are very good at chess can struggle with so many moving parts in so many dimensions. Preparing an estate plan requires careful consideration of family dynamics, and those are multiplied in blended families. This is another reason why estate plans need to be tailored for each family’s circumstances, as described in the article “Blended families have unique considerations in estate planning” from The News Enterprise.

    The last will and testament is often considered the key document in an estate plan. But while the will is very important, it has certain limitations and a few commonly used estate planning strategies can result in unpleasant endings, if this is the only document used.

    Spouses often leave everything to each other as the primary beneficiary on death, with all of their children as contingent beneficiaries. This is based on the assumption that the second spouse will remain in the family home, then will distribute any proceeds equally between the children, if and when they move or die. However, the will can be changed at any time before death, as long as the person making the will has mental capacity. If when the first spouse dies, the relationship with the surviving children is not strong, it is possible that the surviving spouse may have their will changed.

    If stepchildren don’t have a strong connection with the surviving spouse, which occurs frequently when the second marriage occurs after the children are adults, things can go wrong. Their mutual grief at the passing of the first spouse does not always draw stepchildren and stepparents together. Often, it divides them.

    The couple may also select different successor beneficiaries. The husband may name his wife first, then only his children in his will, while the wife may name her husband and then her children in her will. This creates a “survival race.” Winner takes all. The surviving spouse receives the property and the children of the spouse who passed won’t know when or if they will receive any assets.

    Some couples plan on using trusts for property distribution upon death. This can be more successful, if planned properly. It can also be just as bad as a will.

    Trust provisions can be categorized according to the level of control the surviving spouse has after the death of the first spouse. A trust can be structured to lock down half of the trust assets on the death of the first spouse. The surviving spouse remains as a beneficiary but does not have the ability to change the ultimate distribution of the decedent’s portion. This allows the survivor the financial support they need, giving flexibility for the survivor to change their beneficiaries for their remaining share.

    Not all blended families actually “blend,” but for those who do, a candid discussion with all, possibly in the office of the estate planning attorney, to plan for the future, is one way to ensure that the family remains a family, when both parents are gone.

    Reference:

    The News Enterprise (November 4, 2019) “Blended families have unique considerations in estate planning”

  • We Can Grow New Brain Cells Well Past Retirement Age

    We Can Grow New Brain Cells Well Past Retirement Age

    “You have power over your mind—not outside events. Realize this, and you will find strength.”—Marcus Aurelius.

    “The mind of man is capable of anything.” —Joseph Conrad.

    For many decades, people assumed cognitive decline was inevitable with advanced age. Medical experts said people stopped making new brain cells as adults, so when we lose cells through injury or deterioration, there are no “spare parts” to replace them. As a result, it seemed logical that cognitive impairment was only a matter of time.

    The nagging doubt about this theory was the fact we all know people who remain mentally sharp well into their nineties and even past the age of 100. As it turns out, you were not the only one who might have wondered about the accuracy of the long-held assumption of inevitable age-related cognitive decline. A recent study reveals we can grow new brain cells well past retirement age.

    Columbia University and the New York State Psychiatric Institute worked together on a study designed to explore this issue. They performed autopsies soon after death on the brains of 28 people ranging in age from 14 to 79. The subjects had all been healthy prior to sudden death. None of them had cognitive impairment during their lives.

    The researchers examined the hippocampus area of the brain. The hippocampus processes learning and memory and grows new brain cells to replace those we lose through daily attrition. In particular, the scientists looked at the neurons (nerve cells) and blood vessels within the hippocampus.

    Although the brains of the older subjects in the study did not form as many new blood cells and their new neurons might not have been able to make as many connections as the brains of the younger subjects, the study revealed a startling fact. The brains of healthy older people continue making new brain cells, just as well as the brains of younger healthy people.

    There was no difference in the volume of new brain cells between the younger and older brains. Since the hippocampus does not stop making new brain cells as long as you stay healthy, the researchers concluded many seniors do not suffer cognitive or emotional decline, despite the common assumption to the contrary.

    Take-Aways from the Study Findings

    Seniors do not get the respect they deserve in American society. One excuse people get for being dismissive of their elders, is the widely held belief that old people become mentally feeble. This research challenges this idea and shows that healthy older people can be just as sharp as people in their youth.

    The common belief about seniors having cognitive decline can be a self-fulfilling prophecy. If a person believes cognitive decline is an automatic part of aging, the person might not try to prevent this result. We all know people who suddenly start to act older after they hit a milestone birthday, as if living up to their expectations for a person of that age.

    Now that we know there is no such thing as automatic cognitive decline because of age, we can do something about it. You can stay sharp as long as you stay healthy. Keep learning and reading. Study a foreign language. Do word puzzles. Stay socially active and involved in your community. Take a walk every day to get regular physical exercise. Eat nutritious food.

    And above all, avoid things that damage brain cells, particularly the hippocampus. Misusing drugs, even prescription ones, drinking too much alcohol and smoking can all damage the hippocampus. If the hippocampus is not healthy, you will not be able to continue making new brain cells as you age.

    Reference:

    AARP. “Older Adult Brains Can Grow Thousands of New Cells.” (accessed May 30, 2019).

  • Can I Correct an IRA RMD Mistake?

    Can I Correct an IRA RMD Mistake?

    It’s not uncommon for an individual to inaccurately calculate their required minimum distribution (RMD) for their account. Maybe you forgot that your brokerage firm divided the account in two and they didn’t tell you. This mistake may result in a person failing to withdraw the mandatory amount from an IRA.

    What can a person do at this point? If the mistake was caused by an oversight at the brokerage firm, can you avoid the 50% penalty, if they admit the error in a letter to the IRS?

    Kiplinger’s recent article, “How to Correct a Mistake on Your RMDs from IRAs” advises that you don’t need to send the IRS a letter from the brokerage firm, but you do need to take some action immediately to ask the IRS if it will waive the penalty.

    You need to first figure out the exact amount you should’ve withdrawn as your RMD and withdraw the money right away, if you haven’t already. You should then file a separate Form 5329 immediately for each year’s RMD you missed.

    You should fill in lines 52 and 53 with the amount you should have withdrawn, then write “RC.” This means “reasonable cause.” Also write in the amount of the penalty you want waived in parentheses on the dotted line next to line 54. You should include a brief note that says the RMD was omitted by the brokerage company and was withdrawn immediately upon discovery. Keep it brief—don’t go into all the details.

    You shouldn’t send any penalty money, unless the IRS denies your request for a penalty waiver.

    Denials are pretty rare, especially for someone who withdrew the money as soon as she realized the mistake and filed Form 5329 proactively with reasonable cause.

    Retain the letter or any communication in your files from the broker saying that the firm made a mistake, but don’t send it to the IRS.

    Can I Correct an IRA RMD Mistake? Yes you can. You can review the Instructions for Form 5329 for more information about the procedure.

    Reference:

  • Do I Need a Living Trust or a Will? Or Both?

    Do I Need a Living Trust or a Will? Or Both?

    “Tax planning is one element of estate planning, and in many estates is the least important factor. The larger issue is: Who will inherit and what will they inherit?” First National Trust Update April 2015.

    “A man of 70 need not be always feeling, much less talking, about his approaching death, but a wise man of 70 should always take it into account. …He would be criminally foolish not to make, indeed not to have made long since, his will.” C. S. Lewis (1898-1963).

    Do I need a living trust or a will? Or both? This is just one of the reasons people think they want a trust: to ensure that the value of their overall estate will not decrease, because of the cost of probate. The most common way to do that is with a trust, says The Houston Chronicle in the article “Elder Law: Which should I have—A Living trust or a will?”.

    In some states, probate is not an expensive or overly time-consuming issue. Texas, for example, has what is called an independent administration. Executors handle the tasks involved in settling an estate and distributing assets to beneficiaries. As a result, there’s very little court involvement. However, New York does not have that process and as a result probate has extensive court involvement. An estate planning attorney in your area will be able to explain the details of your state’s procedures and discuss whether a trust is right for your estate. They’ll also explain the difference between different types of trusts.

    The trust most frequently used to avoid probate, is known as a revocable trust, living trust or an “inter vivos” trust.

    Selecting the best type of trust for each situation is different. Here are some advantages of living trusts:

    Avoiding probate. The cost of probate alone is not reason enough to use a trust. However, if your assets are in trusts, you may not need to file an inventory listing your assets with the court. That’s not always required in every jurisdiction, but if it is required where you live, a trust can help keep your asset list private, by ensuring that it is only seen by beneficiaries.

    Asset management for incapacity. A living trust goes into effect, while you are alive. If you become incapacitated, an alternate trustee can step in to manage assets, pay bills and ensure that finances are taken care of.

    Avoiding probate in another state. If you own out-of-state property, your estate may need to be probated in your home state and in the other state. If you have a living trust, out-of-state parcels of land can be deeded into the trust during your lifetime, thus avoiding the need for probate in another state. After your passing, your trustee can handle the out-of-state property in the living trust.

    Administrative ease. There are, unfortunately, instances when Power of Attorney can be challenged by financial institutions. The authority of a trustee is more likely to be recognized, by banks, investment companies, etc.

    There are some questions about whether it’s better to have a living trust or a will. The most complex part of having a living trust, is the process of funding the trust. It is imperative for the trust to work, that every asset you own is either transferred into the trust or retitled into the name of the trust. If assets are left out or incorrectly funded, then probate will probably be necessary. This can occur, even if only one single asset is left out.

    If an asset is controlled by beneficiary designation, then the trust may not need to be named a beneficiary, should you want it to pass directly to one or more beneficiaries.

    Funding the trust becomes complicated, when retirement accounts are involved. Consult with an experienced estate planning attorney, if you want to make the trust a designated beneficiary of a retirement account. This is because very specific and complex rules may limit the ability to “stretch” the distributions from the account.

    Using a trust instead of a will-based plan is growing in popularity, but it should never be an automatic decision. An estate planning attorney will be able to explain the pros and cons of each strategy and help you and your family decide which is better for you and what advanced directives are required.

    Reference:

  • Life Insurance in My Estate Plan?

    Life Insurance in My Estate Plan?

    You’re not alone if you don’t fully understand the value and benefits that life insurance can give you as part of a retirement plan. Kiplinger’s recent article, “Don’t Overlook Advantages of Making Insurance Part of Your Retirement Plan,” says many folks see life insurance as a way to protect a family from the loss of income in the event a breadwinner passes away during his or her working years.

    If that’s your primary purpose in buying a life insurance policy, it’s a solid one. However, that income-replacement function doesn’t have to stop in retirement.

    When a spouse passes away during retirement, the surviving spouse frequently struggles financially. Some living expenses might be less when there’s just one person in a household, but the reduction in costs rarely makes up for the drop in income. One of the two Social Security checks the couple was getting goes away, and a pension payment may also be lost or reduced 50% or 75%. Life insurance can be leveraged to make certain there’s sufficient cash to compensate for that missing income. This lets the surviving spouse maintain his or her standard of living in retirement.

    Why should I have Life Insurance in My Estate Plan? There are several sections of the tax laws that give life insurance income tax and transfer tax benefits. For example, death benefits typically are paid income-tax-free to beneficiaries and may also be free from estate taxes, provided the estate stays under the taxable limit. Also, any benefits paid prior to the insured’s death because of chronic or terminal illness also are tax-free. This is called an accelerated death benefit (ADB) and is a pretty new option. If your insurance doesn’t have this coverage, it can probably be added as a rider.

    Finally, cash values can grow within a permanent life insurance policy without being subject to income tax. Any cash values more than the policy owner’s tax basis can be borrowed income-tax-free as long as the policy stays in effect. But if you were to pass away prior to paying back your policy loan, the loan balance plus interest accrued is deducted from the death benefit given to the beneficiaries. This may be an issue if your beneficiaries require the entire amount of the intended benefit. When the loan remains unpaid, the interest that accrues is added to the principal balance of the loan. If the loan balance increases above the amount of the cash value, your policy could lapse. That means you could you risk termination by the insurance carrier. If a policy lapses or is surrendered, the loan balance plus interest is considered taxable, and the taxes owed could be pretty hefty based on the initial loan and interest accrued.

    There are fees that can includes sales charges, administrative expenses, and surrender charges. That’s in addition to the cost of the insurance, which grows as you age.

    Just because you’re retired doesn’t mean you don’t still need the protections and benefits life insurance can offer you and your family.

    Reference: