For many affluent individuals, the financial legacy they leave behind is an extremely important issue. You want to make sure that nothing jeopardizes what you have worked so hard to achieve.
Estate planning is more important now than ever. Without proper planning, you could lose a large share of what you have spent your whole lifetime accumulating. Because estate planning is about making sure your assets are distributed as you wish both now and after you are gone, you need to consider some important questions before you begin, such as:
Many people have life insurance policies that are not matched to their estate planning goals. Between the typical set-it-and-forget-it mentality and a simple beneficiary approach many people take, a neglected life insurance policy often fails to achieve the goals that initially led to the purchase of the policy. For example, you might think your life insurance is entirely separate from your other assets. As a result, you fail to adequately account for this asset in your estate plan, missing opportunities to provide for your family. However, these vulnerabilities can often be identified with a full review of your estate plan, so you can correct them before any negative outcomes occur.
Personal trusts remain a valuable tool for protecting assets from creditors, legal claims and offspring with poor money-management skills. Homes, for example, are often the most valuable asset and one of the largest components of a taxable estate. A qualified personal residence trust (QPRT) allows you to give away your house or vacation home at a great discount, freeze its value for estate tax purposes and still continue to live in it. An irrevocable life insurance trust allows you to own your life insurance policy. A properly established and administered trust holds the policy outside of your estate and keeps the proceeds from being taxable to your estate. Then you can use the insurance proceeds to provide your estate with the liquidity to pay off debts, estate taxes and final expenses, and provide income to a surviving spouse or children.
Life insurance is critical for affluent families because liquidity is often a concern. Assets may not be easily transferred into cash when somebody passes away. Life insurance enables surviving family members to cover costs associated with the death of a loved one — as it may take time to sell the family home or turn other assets into cash that is more easily divided among heirs. Income replacement, of course, also can be a concern. How families will continue if a primary breadwinner passes away is a relevant concern across all income groups.
As a Personal Insurance Consultant, Scott helps clients meet their personal insurance goals by thoroughly reviewing their current risk exposures and advising them on gaps in coverage.
As a Personal Insurance Consultant, Scott helps clients meet their personal insurance goals by thoroughly reviewing their current risk exposures and advising them on gaps in coverage. Once these potential short falls in coverage are identified, Scott will recommend solutions through a consultative approach, helping clients not only cover these risk exposures, but help them gain a broad understanding of what their insurance coverage can do for them. He has helped clients with personal insurance needs for 10 years, in all 50 states, and specializes in working with the complex situations of affluent clients.
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