Business owners face countless challenges day to day, but planning for the future can be even tougher. For a family-owned business—with some children more involved than others—outlining estate equalization arrangements can be tricky, especially when most of the wealth is tied to the business. This leaves the family with a complicated situation: how can they provide the children with equitable shares upon the parents’ death?

Selling the business and dividing the proceeds among the siblings is one option. Splitting the current value and requiring the involved children to purchase the ownership interest from their siblings is another. But, both of these options can create disruption, cash flow issues, and hard feelings among family members.

By establishing a life insurance plan, the parents can ensure each of the children who aren’t involved in the business receive an equal amount of the family estate without disrupting the business. This can be done through one or multiple policies with ownership through a trust, the family business, or the parents themselves. This option provides the parents with the flexibility to customize the plan.

A life insurance plan is a simple solution for those trying to ensure things are equal when:

  • There are kids who have no interest in running the business
  • A business is involved that isn’t big enough to take care of everyone
  • An individual wants to ensure that the next generation is taken care of, whether they’re involved with a business or not
  • A client wants to enjoy their wealth without any concerns about interfering with the next generation’s inheritance

But, a life insurance plan has a premium expense, and the next question is, what’s the best way to pay the premiums due?

Life insurance premium financing is a great tool to provide relief from large premium payments for necessary life insurance, while ensuring the family retains the cash flow it needs for other investments and expenses. Rather than tie up funds by paying the life insurance premiums, the family can use financing to keep their money accessible and growing.

For more information on how Wintrust Life Finance can help with estate equalization financing, please visit