LifePath Resources Group | Five Essential Estate Planning Tools

How To Make Your Estate As Secure As A Castle
By Intelligent Use
Of These Five Estate Planning Tools

When most people think of estate planning, they think of wills — and often don’t think much further. Or they think that because they employ the services of an attorney and a tax person (CPA, EA, accountant) that their estate affairs are well in order.

Nothing could be farther from the truth. If you didn’t know that, you’re not alone! Very few people know what you really need for a good estate plan, including most advisors.

(Watch this video on Basic Estate Planning Mistakes to Avoid and know more than most advisors.)

Want to see how you compare to others in your estate planning savvy?

Check out how many people, out of 10, don’t have the following estate planning tools in place, based on statistics we’ve gathered here at the Wealth Preservation Institute:

Estate Planning Tool:	People WITHOUT	Why you want this…
Will (simple)	1-2	Without it… • The state decides who gets your assets at death • The state decides who gets custody of your minor children
Marital Trusts	5-6	In general, to save on estate expenses… • by maximizing estate tax exemptions • avoid costly probate (up to 4-10% of the entire estate) • protects certain assets from the government as a set off for long term care expenses
Irrevocable Life Insurance (ILIT)	7-8	Life Insurance proceeds pass to the beneficiaries free of income tax and free of estate tax.
Durable Power of Attorney (DPA)	9-10	When used with “springing” provisions, such as incapacitation, a DPA allows someone to handle legal and financial affairs on behalf of the incapacitated person.ah When used in healthcare, it gives the “attorney in fact” the ability to make end-of-life decisions, such as removing life support.
Family Limited Partnership (FLP)	9-10	FLPs help to protect assets and because of the potential federal gift and estate tax benefits, can lower the tax bite when transferring assets to family members.

You can click on any of the topics in the table above to read more about it. Either an e-document will show up for you to read on your screen, or you will be given the opportunity to download it to your computer.

These aren’t the only tools you can use to protect your estate — here are other valuable tools to consider (click on any of them for more info):

• Life Insurance (LI) - Life insurance has gotten a bad reputation in some circles because of some insurance agents who have sold LI policies that are not in their client’s best interest. However, used correctly, LI is a valuable estate planning tool. Here are some of the important benefits LI can provide…

Type of client	Beneficial Use
Younger clients	Family provision in the case of an early death by the income-producing parent(s).
Varied	As an investment, since assets grow tax free and come out tax free especially when used with “Equity Harvesting”).
Clients with estate tax problems	Payment of estate taxes.

• Life Settlements (LS) - If you or your parents are nearing 65 and have a life insurance policy, you should find out more about this interesting estate planning tool. At 65, it may not make sense to continue to keep a life insurance policy you don’t need. Why might you no longer need a life policy at 65? Because…

• The beneficiary might have pre-deceased you…
• You can not afford or do not wish to pay the premiums…
• You´re policy is not owned by an ILIT (see above) and it should be…

• Reverse Mortgages (RM) - We may be taking a different viewpoint than you´ve seen. And this is not unusual. Many financial vehicles where the seller stands to gain more often get widely publicized. Here´s our take on RMs (and don’t forget, you can find out more by clicking on the link!):

• If you are 62 and you want to stay in your home, RMs can be useful. Sure, they are sold as having no risk and no downside — but the truth is, you pay dearly for that security. In general, RMs are very expensive and frequently the WRONG choice.
• Most often, a client who wants to escape monthly payments and get equity out of their home would be better off

• selling that home and downsizing, or
• by using the 1% CFA Mortgage coupled with a single premium immediate annuity

• Long-Term Care Insurance (LTCI) - LTCI is one of the most overlooked forms of insurance. Perhaps people think they will never need it (the statistics show that nearly everyone will), that they are already covered (neither health insurance, disability insurance, or Medicare cover it, except in very limited circumstances), or that it is simply too expensive. Yet it is possible to set up LTCI and be able to deduct the premiums, and, in some cases, even have the premiums returned to the estate. If you want to leave an inheritance, and not be a burden, this is an option wise clients look at seriously.

• Charitable Trusts and Annuities - Think charitable planning is out of reach? Would you be interested if we told you that appropriate charitable planning could…

• Increase your discretionary (”spendable”) income?
• Reduce or eliminate your income taxes?
• Reduce or eliminate your capital gains taxes?
• Reduce or eliminate your estate taxes?
• Secure a tax free inheritance for your heirs?
• Allow you to leave a lasting family?
• Allow you to leave a social legacy?
• …all of the above ?

These ten tools are just the basics to be considered in a robust estate plan. There are more we can help you utilize if your situation warrants them.

Think you might be missing out on something? Why not call for a no-obligation review of your current estate plan and discover how you can increase your estate — and protect it at the same time? Just click here to contact us!

How To Make Your Estate As Secure As A Castle By Intelligent Use Of These Five Estate Planning Tools

How To Make Your Estate As Secure As A Castle
By Intelligent Use
Of These Five Estate Planning Tools