Dealing with Toxic Succession Issues
Protection of estate and business clients from potentially serious environmental cleanup liabilities resulting from the passing of contaminated real property at death (toxic succession) requires up front planning. The use of life insurance as a funding mechanism for future cleanup costs is often an elegant first prong of such toxic succession planning efforts.
Environmental contamination of real property is widespread. It can occur from any of numerous commercial, industrial or agricultural sources, including gasoline service stations, dry cleaners, chemical or pesticide storage, and manufacturing operations, and can lead to liability for potentially catastrophic cleanup costs associated with the contamination. The potential for toxic succession issues can present unique opportunities for insurance brokers who provide life insurance for buy-sell agreements, in “key man” situations, and as an estate planning tool.
Being aware of potential toxic succession problems faced by heirs, beneficiaries and surviving business partners can open up fresh avenues for brokers to acquire new clients, and can result in revisiting – and adding higher limits – to existing policies. With just a little additional planning, and strategic help from toxic succession professionals, life insurance brokers can add significant value for clients that may have toxic succession concerns.
Resources:
•Campaign 5000: Toxic Succession Whitepaper
•Planned Giving Today article by Kevin Daehnke
•Contaminated Property: Proactive Planning Strategies to Maximize Estate Value and Avoid Draconian Results
•Environmental Cleanup Costs: Professional Negligence for Failure to Warn Successors and Beneficiaries
