Creating a Tax-Free Legacy and Equalizing an Estate
When most of your wealth is tied up in a business, how do you pass it on without creating family conflict? For Robert, a successful manufacturer with two children on very different paths, the question wasn’t about building wealth — it was about balancing it. The strategy he chose not only created fairness between heirs but also built a lasting, tax-free legacy with room for future generosity.
Andrew Perez
September 17, 2025
Client profile
Age
48
Occupation
Business Owner (manufacturing company)
Marital Status
Married, two children (ages 20 and 23)
Net Worth
$8M (company valued at $5M, real estate portfolio, retirement assets)
Challenge
Robert wanted to ensure an equal inheritance for his children. One child was heavily involved in the family business, while the other pursued a career in the arts and had no interest in ownership. Robert’s concern was that, if he passed unexpectedly, most of his assets would go to the child in the business, creating family conflict.
Solution
- Policy Type: Participating Whole Life Insurance
- Face Amount: $2,500,000
- Premium Design: 10-Pay (fully funded in 10 years)
- Owner: Irrevocable Life Insurance Trust (ILIT)
Why It Worked
The guaranteed death benefit and cash value accumulation gave Robert a predictable, tax-free way to provide equalization for his non-business child, without forcing the sale of business assets. The cash value buildup also provided flexibility — if he sold the business in the future, he could access the cash value tax-advantaged for retirement income.
Outcome
Robert feels confident his estate is balanced, and the family business can pass seamlessly to his child, who works there. He also enjoys seeing the annual dividends grow the policy’s death benefit, further enhancing the legacy. In 15 years, he plans to use the paid-up policy dividends to help fund charitable giving.