ESTATE PLANNING

Estate planning is simply determining (while you’re still alive) where your assets should go after you die. Without a properly structured estate plan, your wishes may not be fulfilled, and your loved ones could be hurt both emotionally and financially.

It is important that one get their estate in order as early as possible. It is also important that one continue to actively manage their estate plan as factors of their financial situation and personal life evolve. It makes all the difference to have a trusted advisor who can guide you along the way.

Everyone has an estate plan, whether intentional or by default. If you think you have no plan, because you have not made out a will or a trust, you still have a plan—it is simply one that is dictated by the laws of the state where you reside at your death. People who die without wills or trusts are said to die intestate. State law provides the rules of distribution that must be followed when a person dies intestate. In most cases intestate estates must be probated, which involves a court proceeding, and in many cases state law may require a distribution that you may not want. It may be a very good idea to avoid intestacy by having a will or a “living trust” that is designed for your particular needs. In many cases a revocable “living” trust is better than a will.

We can coordinate with your CPAs, attorneys, and other financial advisers to develop and implement the best estate planning strategies to incorporate into your personal financial planning.

Estate Planning beyond Tax Planning

Proper planning involves anticipating and reducing the estate tax liability wherever possible as well as providing for payment of the tax. However, Estate Planning is also about people and their desire to provide for their loved ones. Estate creation, income replacement, and the orderly transfer of property from one generation to the next continue to be the primary objectives of most estate plans. You may need to provide care for minor children, support for disabled children and elderly parents, and the protection of loved ones from creditors. Most importantly, are there enough life insurance proceeds, liquid assets and other sources of income to help maintain the current living standards of your surviving family?

Estate planning may include the following important tasks:

• Creation of wills
• Establishment of trust accounts to limit estate taxes if necessary
• Naming an executor
• Establishment of a guardian for living dependents
• Creating beneficiaries for IRAs, 401(k)s, life insurance policies and other such plans
• Setting up annual gifting to reduce the taxable estate
• Setting up durable power of attorney to handle both financial and medical situations

IRA Legacy Planning; IRA accounts have become one of the largest types of assets inherited by beneficiaries. If you don’t anticipate needing your IRA money in retirement, you may wish to consider a legacy planning strategy to reduce taxes and increase the payout your beneficiaries will inherit upon your death.

A properly structured IRA may provide your beneficiary(beneficiaries) a regular stream of income while leaving the balance of IRA assets invested for tax-deferred growth. The result may yield substantially more money paid out over the course of your beneficiary’s lifetime. We can help you evaluate your financial scenario to determine if IRA legacy planning may be the best means for ensuring a long-lasting inheritance for your heirs.

By focusing on the areas of retirement Income Planning, tax Planning, and wealth preservation, we can help you protect your existing assets and we help you pass on the bulk of your wealth to your loved ones.

Probate

Probate is the potentially lengthy and costly legal process that oversees the transfer of your assets upon your death. If you do not create a will or set up a trust to transfer your property when you die, state law will determine what happens to your estate. This is called probate or “intestate.” Without a will or some other form of legal estate planning, there is the chance that some or all of your property may go to the state instead of to your family.

Charitable Giving

Creating a charitable gift giving plan may provide you with multiple tax breaks: an income tax deduction, the avoidance of capital gains on highly appreciated assets, and no estate taxes on the charitable contribution upon your death.

Life insurance in Estate Planning

Estate planning can be a real challenge—even with a will in place. Life insurance death benefit proceeds can provide the liquidity needed to pay off debt, replace income, supplement retirement income, create an equitable inheritance between heirs, and even provide protection for businesses. Ensure that your plans are intact when you need it most.

Who can benefit? Beneficiaries, which may include a surviving spouse, children, other loved ones, and even business partners.
Why life insurance? Death benefit proceeds provide liquid funds where other assets can take time and specialized help to sell.
Individuals or trusts may be named beneficiaries of the policy.

Uses of Life Insurance in Estate Planning:

Life insurance can protect your survivors financially by replacing your lost income

life insurance proceeds are available very quickly, so your family has cash to meet their short-term financial needs. Life insurance proceeds left to a named beneficiary don't pass through the process of probate, so you don't have to wait until your estate is settled to get the money they needed to pay bills. The Probate process can take up to 6 months or longer to resolve through the courts and legal system, not to mention expenses and the time needed to deal with the process.

Life insurance can replace wealth that is lost due to expenses and taxes

Use life insurance to cover the potential costs of settling your estate, including taxes, fees, and other debts that his estate would have to pay. These expenses can take a big bite out of your estate by the time it’s settled. Your heirs might have to sell valuable assets to pay the taxes and expenses that arose as a result of your death.

Life insurance lets you give to charity, while your estate enjoys an estate tax deduction

Using life insurance, you can leave a substantial gift to a favorite charity. Since gifts to charity are estate tax deductible, this gift was not subject to estate taxes when you die.

Life insurance won't increase estate taxes--if you plan ahead

Before buying life insurance, understand the potential tax consequences. if your estate is large enough, it could be subject to federal and state estate taxes, depending on the applicable law at the time of death. If need be, a trust can be set up to own the policy and therefore remove the life insurance proceeds from the estate and help pay for some of the potential estate taxes that might be owed at death.

Life Insurance proceeds avoid probate, which can be a lengthy, costly and time consuming process for heirs.

Life Insurance can aid in creating an equitable inheritance between heirs when hard to divide assets such as a business or property are part of the estate. Maybe one child who has been involved in the family business would like to retain ownership of that business therefore leaving what might be a potentially large discrepancy in dividing up the assets equitably among the remaining surviving children should the business be a large percentage of all assets. Life insurance proceeds can be used to provide non-business heirs with “equitable” treatment if the parents’ desire is to pass the business intact to a business participating son or daughter. Doing this can prevent the business from being split into smaller units of uneconomical size to make an “equal” division among children. Leaving the business to the operating heir and life insurance proceeds to non-business heirs prevents the operating heir from having to buy out the interests of other heirs when he/she may be unable to afford it.


Life Insurance can provide protection for businesses. Funds for the surviving partner to buy the partnership interest of the deceased partner from the heirs. This enables the business to continue as an on-going enterprise.

Consult an experienced attorney and or CPA about income and estate tax consequences before purchasing life insurance

Call or email today for a no obligation consultation. 973-285 -1040