Family wealth
Estate liquidity: so your heirs don’t have to sell the business or the buildings
An estate can be worth a lot and still be short on cash. A liquidity review identifies what will need to be paid or evened out, so your heirs don’t have to rush a sale of the business or real estate.
Life insurance can supply that cash, but only after you know how much is actually needed, and when.
Who this is for
- Owners of a closely held business or rental portfolio
- Families where one child will run the business and others won’t
- People with concentrated investments that would be costly to sell quickly
Most families don’t have a federal estate tax problem. Many do have a cash problem
For 2026, the federal basic exclusion is $15 million per person. That doesn’t mean every estate under that number has nothing to file or plan for; prior taxable gifts and other factors count.
New Jersey has had no estate tax for deaths on or after January 1, 2018, but its inheritance tax still applies to some heirs. See our NJ inheritance tax page.
Even without tax, there are debts, administration costs, and the challenge of treating heirs fairly when the main asset can’t be split.
Ownership decides whether the insurance adds to the problem
Insurance you own personally is generally counted in your federal estate. An irrevocable life insurance trust (ILIT) can own the policy instead: the trustee is the owner, the trust is the beneficiary, and the trust terms say how proceeds are used. An ILIT is a legal document your attorney drafts, not an insurance form.
Second-to-die only helps if the need comes at the second death
A survivorship (second-to-die) policy pays after both spouses die. That fits needs that arise at the second death. It doesn’t help with cash needed when the first spouse dies.
Illiquid value vs. available cash
Your CPA or attorney fills in the numbers. Keep each line separate so nothing is counted twice.
| Line | Estimate |
|---|---|
| Federal estate tax exposure (if any) | |
| NJ inheritance tax by beneficiary | |
| Administration and settlement costs | |
| Debts that come due | |
| Equalization between heirs | |
| Cash and liquid assets available | |
| Gap to fund |
What to bring to the review
- Your current will and any trusts
- A list of business interests and real estate
- Debts and loan terms
- Existing policies and beneficiary designations
- Prior taxable gift information
- Your succession wishes (who gets what)
Mistakes that cost people later
- × Buying “estate tax insurance” without an actual exposure analysis.
- × Treating NJ inheritance tax and federal estate tax as the same tax.
- × Assuming insurance you own personally stays out of your estate.
- × Treating an ILIT as an off-the-shelf form.
- × Using second-to-die coverage for a first-death need.
- × Transferring existing policies without your attorney.
Questions people ask
How will my children pay estate expenses if everything is in property?+
That’s the liquidity gap. Insurance owned the right way can provide cash so assets don’t need to be sold quickly.
Do I need estate-tax insurance if I live in New Jersey?+
NJ has no estate tax for deaths since 2018, and the 2026 federal exclusion is $15 million per person. Your need may be inheritance tax, liquidity or fairness between heirs instead.
Can insurance help one child keep the business?+
Yes. It can provide value for the other heirs so the business doesn’t have to be split or sold.
Should a trust own the policy?+
Often, for larger estates, an ILIT owns it to keep proceeds out of the taxable estate. Your attorney drafts and advises on it.
Would a second-to-die policy help?+
Only for needs that arise when the second spouse dies.
Does my existing insurance count in my estate?+
Policies you own or control are generally included. Review ownership with your attorney.
Start a Life Planning Review
Tell Kevin what you need the coverage to accomplish. It takes a few minutes, there are no health questions online, and existing policies and documents are reviewed through a secure process.
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Kevin Brown, licensed New Jersey insurance producer (#3003694894)
Kevin Brown Insurance Agency, South Plainfield, NJ. You work with Kevin directly on every life case. Updated November 2026.
Coverage, policy features, premiums and underwriting requirements depend on the insurer, product, applicant and state availability. Approval is not guaranteed. Illustrations are not promises of future performance. Kevin Brown Insurance Agency does not provide medical, legal or tax advice. Consult your attorney or CPA about your circumstances.