STRATEGIC RETIREMENT SOLUTIONS
5 Estate Planning Tools
It’s amazing, but there are millions of Americans who do NOT have their estate plans in order.
Some think that a simple will is an estate plan. That is not the case. If you have any amount of wealth (especially if you have a spouse and/or children), you really need to have each of the following estate planning tools. The numbers included below are the average number of people out of ten who do not have each tool.
01. Will
People without it: 1-2 out of 10
Without it…
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The state decides who gets your assets at death
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The state decides who gets custody of your minor children
02. Marital Trusts
People without it: 5-6 out of 10
In general, to save on estate expenses…
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maximize estate tax exemptions
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avoid costly probate (up to 4-10% of the entire estate)
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protect certain assets from the government as a set off for long-term care expenses
03. Irrevocable Life Insurance (ILIT)
People without it: 7-8 out of 10
Life insurance proceeds pass to the beneficiaries free of income tax and free of estate tax.
01. Durable Power of Attorney (DPA)
People without it: 5-6 out of 10
Legal powers allow someone to act on your behalf when you become incapacitated (to pay bills, remove money from IRAs, sell stocks, etc).
Medical powers allow someone to make decisions about your healthcare (such as make end-of-life decisions and whether life support should be continued or a feeding tube removed).
02. Family Limited Partnership (FLP)
People without it: 9-10 out of 10
FLPs help to protect assets from creditors and to help reduce gift and estate taxes when transferring assets to family members.
The above mentioned tools are the basic ones that most people with any amount of significant wealth should have. If your estate plan doesn’t incorporate these tools, the chances are significant that it is incomplete (which means you could be leaving your assets vulnerable to probate costs, estate taxes, legal proceedings, and more).
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