Going through a divorce in Pennsylvania can be stressful. It can put a strain on a person’s mental, emotional and financial state. Some of the stress of divorce is unavoidable as it is a process that impacts nearly every area of a person’s life. It is possible, though, to mitigate some of the stresses, especially those that are related to finances. People who are considering or going through a divorce might reduce the financial burden by using life insurance.
Life insurance can be an effective tool for estate planning regardless of the person’s marital status, but it can be especially effective for people who are divorced or divorcing. People who have established insurance policies can use the funds to make withdrawals or loans to cover expenses related to the divorce, which might stretch on for months or years. A life insurance policy can also be used to protect the person’s income once the divorce is finalized. A policy taken out on the ex-spouse who pays alimony can protect that income for the other spouse.
A life insurance policy can also be used to pay off debts, preventing the person from having to liquidate assets to cover them. If the policy is set up properly, there may be no tax consequences to withdrawing funds. For estate planning, a life insurance policy can provide peace of mind that any inheritance for children is also protected.
People who have questions about divorce or estate planning in Pennsylvania might want to speak with an attorney. An attorney who practices estate planning and probate law may be able to help by examining the client’s circumstances and suggesting instruments like a will, trusts, powers of attorney or life insurance policies. With a bit of planning, the client may be assured that his or her loved ones will be taken care of after death.