Business-Related Uses of Life Insurance in Estate Planning

Planning
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James “Jim” Javaras is president and founder of the BHR Life Companies and provides business owners, as well as individuals and families, with a full range of insurance solutions. One area of focus for James Javaras is estate planning, which involves anticipating and designing optimal pathways for the disposition of estates.

This often includes creating wills and living trusts, as well as making gifts and purchasing insurance. The latter can be employed in facilitating a business succession plan and safeguarding against contingencies in which some, or all, of the children or other heirs are not interested in or suited to business ownership.

In cases where the business is a major part of the estate’s assets, ensuring that assets are shared among beneficiaries according to a will's stipulations is often challenging. A life insurance policy can be used to provide the cash that makes distributions more equitable and easier to achieve. In addition, it can guarantee liquidity and the cash flow necessary to keep a business running for a time, when the principal is deceased.

Another major reason for taking out insurance is that, for businesses with buy/sell agreements and multiple partners in place, it can ensure that surviving partners will have the cash at hand to purchase the interest of the family of the deceased partner.

Federally-mandated Employee Benefits

Employee meeting

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James ‘Jim’ Javaras founded the BHR Life Companies more than three decades ago to serve as an advisory firm for companies across New England. Jim furnishes insurance solutions related to business planning, estate planning, and employee benefits.

With regards to employee benefits, Jim and his knowledgeable team offer businesses insight and support to implement employee benefit products, including ones mandated by federal laws.

Under federal law, all full-time employees are entitled to certain benefits from their employers. All companies must offer the following benefits no matter the size of their workforce.

Workers’ Compensation -- All employees must be covered by a workers’ compensation insurance policy. This policy will pay for medical expenses and lost wages incurred due to a workplace injury or work-related illness.

Overtime -- Any employee who works more than 40 hours in a week is entitled to overtime pay. Overtime must be paid out at one and a half times the employee’s ordinary hourly rate.

Unemployment Insurance -- Unemployment insurance provides supplemental income to employees who lose their job at no fault of their own. While specific requirements are enforced on the state level, most qualifying employees can receive up to 50 percent of their salary for up to six and a half months.