Life insurance is also an important part of an estate plan. It offers the key benefit of providing liquidity to an estate upon death. Liquidity, or cash, is most often required for the following reasons:

• To pay taxes and other liabilities that may be owed by the estate (for example, there may be capital gains taxes to be paid on assets that have appreciated in value).
• For estate equalization purposes - to ensure that each beneficiary is treated equally, liquidity facilitates the transfer of funds to desired beneficiaries without having to sell assets.