Estate Planning Strategies: Knowing Where Your Assets Are Going After You’re Gone!

estate planning

Estate planning, ahh.. I don’t need it! There is a phrase that says you should do your giving while you’re living so you know where it is going. To take this a step further, how about knowing who is going to receive what after you have passed on from this world.

This all has to do with your beneficiaries and what they will receive.

Of course, most people think that they know who their beneficiaries are. Most are wrong because they forget about the main beneficiaries which are the federal and state governments.

You do not need a large estate for these revenue seekers to take a good portion of your hard earned assets.

Knowing the basics is the point of this article and is important for all Americans who have any sizable assets even totaling $100,000 including one’s house. Let’s start with your retirement accounts.

With the exception of the Roth IRA, all retirement accounts, growth in non-qualified annuities will have a tax consequence.

Consider a 20% reduction to your stated beneficiaries since the government wants their fair share.

Maybe a better plan would have been to not have deferred so much into these plans in the first place.

However, if you find later in life that you do not need all the income from these plans, it may make sense to start taking some distributions while you are alive and fund a good permanent life insurance policy or even a hybrid universal life long term care policy.

Long-term care is another huge drain on a person’s assets before they pass on leaving very little for the offspring.

Considering a hybrid universal long-term care policy may provide the death benefit needed along with paying for long-term care expenses while you are still alive but failing in health.

This is called leveraging using the income tax-free benefits of an insurance policy as part of your estate planning. It is a way to pay the necessary taxes to your unnamed beneficiary and give a larger amount back to your named beneficiary.

So part of estate planning is to create leverage using insurance. It is a wonderful tool when used properly.

The next thing to consider is that of a Revocable Living Trust. You would then place your assets under title owned by the trust. The point here is that people die, trusts do not.

If the trust is the owner of the assets in the estate, then it is easier to manage the entire tax liabilities and give your assets to your named beneficiaries.

So you and your spouse if that is the case will be the grantors or the trust, may even be the trustees of the trust while you are living.

This means of course that you can use all your assets just like you did before as trustees of the trust. You would name your beneficiaries inside the trust.

Embedded in the trust are such important documents as medical power of Attorney, living will, financial power of attorney, asset declaration page, when and how those named in the trust will receive your assets.

The reason it is called Revocable is that you as the trustee can add or remove assets, beneficiaries, successor trustees and even executors at any time.

The Revocable Living Trust is a powerful estate planning tool. 

The last issue is your house or houses. These are not considered as valuable to your offspring as they once were over a century ago. Mainly because we are now a more mobile and less of an agrarian society! No one wants the family farm so to speak.

So have you put in place an estate sale to not only sell your personal assets such as furniture, tools, kitchen accessories and everything else that your offspring may not want or need.

The greatest act of love would be to make sure that this activity is in place and accounted for.

I trust that you have gleaned a few nuggets out of this article to begin your estate planning. I urge you to contact well qualified financial, legal and insurance advisors to put together your own personal estate plan.

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