Many high net worth individuals will have significant federal estate taxes due upon death. Life insurance is frequently used to fund these taxes. Westfield Bank has created a special loan program for individuals or trusts to borrow the funds to pay the periodic premiums. The benefits of financing the insurance premiums include:
- Avoids using certain capital assets that may create capital gains taxation upon liquidation.
- Provides leverage by borrowing at recent low interest rates to purchase greater amounts of insurance.
- Frees up other estate assets for purchases or investments, thereby diversifying the estate in other ways.
