PAR it is highly irresponsible (not to say stupid) to croak WITH money in a bank account. Much better to croak with at least $100K +++ IN debt.
Example: a couple of a certain age sees its residential property has risen in "value" multiple times compared to its original purchase price according to their municipal assessment.
They go to the bank with their "Municipal Roll Assessment Tax" bill serving as evidence for the so-called value for muni tax purpose. They go to their bank in a finance company financed automobile which they agreed to insure with a life policy. Arriving at the bank the loans person is all happy to accept the municipal assessment number at face value and grants a "home improvement" line of credit of 55%. Because of bank regulations the line of credit automatically tacks on a $20/month life insurance premium to just in case cover the line - because it is in excess of $50k. Regulation you know...
Side note: the life insurance on both money lines does not kick in until after 2years from date of signing.
The person in whose name are the loans lives 2.5-3years. The loan grantee in that time makes generous use of the line of credit to pay the car monthly payments (6yr deal) and takes out additional monies to make various purchases such as a lawn tractor ($5k), camping trailer ($35K) and a whole bunch of other things including going into the line of credit to pay the incoming monthly payment on the previously taken out monies... totaling ~$80K + all told. (you could call it dog chasing its tail)
2.5-3 yrs into the line the indebtee croaks. The surviving spouse makes a claim against the life policy which pays off the loans' outstanding balances. The survivor ends up with clear title to the car, the residence and all the assorted toys which get promptly sold off for cash (the bank is lackadaisical to check the veracity of the tax bill and on the supposed progress of property enhancement for which the home improvement line was granted). The property, now with only one lonely person living in it, also gets sold for 30% above assessed value. Because as primary residence it is exempt from capital gains.
Impressively, everyone was and is happy in the deal.
PAR07:49:00 GMT - 04/08/2018
42% of Americans have less than $10,000 saved and will retire broke.
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