Puzzle Piece #3

Retirement Puzzle Piece #5

Proper Estate Planning

Learning Video: Proper Estate Planning Part 2

The Importance of Proper Estate and Legacy Planning

Many people believe their future planning is complete if they merely draw up a will. But it’s much more complicated than that. I teach people that they first need to plan for their now money, then plan for their later money and finally plan for their never money. That is, money they don’t plan to touch during their lifetimes.

The best definition of 'The Perfect Estate Plan'
To control your property while you’re alive.
Take care of your loved ones and yourself should you become disabled.
Give what you have to whom you want, the way you want, when you want.
Avoid every family feud possible.
And, save every tax dollar, professional fee and court cost possible.

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The Four Steps to Estate and Legacy Planning

Step 1: Plan for Maximum Wealth Preservation at Death
Step 2: Plan for an efficient Distribution of Assets at Death
Step 3: Plan to minimize Income Tax, Estate Tax and Probate Costs at Death
Step 4: Establish the proper Legal Framework to put everything in place

The Players

Estate Attorneys draw up wills and trusts.
Accountants deal with taxes.
Financial advisors handle investments.
Insurance specialists quarterback the legacy planning. That is, maximize your wealth and protect it from taxation so more can be handed down efficiently to future generations.

What Beneficiaries Need To Know

You may be named as a beneficiary to one or more of a deceased person’s accounts, policies or assets in the event of their deaths. You need to know what to do financially if and when that event occurs.

IRAs, annuities, life insurance policies and qualified retirement plans such as 401(k)s and 403(b)s are set up so that the accounts, policies or assets are payable or transferrable on the death of the owner to a beneficiary, usually an individual named on a document that is filled out when the account or policy is first created.

In addition to the primary beneficiary, the account or policy owner is asked to name a contingent (secondary) beneficiary. The contingent beneficiary will receive the asset if the primary beneficiary is deceased.

Some retirement accounts and policies may have multiple beneficiaries. Charities are also occasionally named as beneficiaries. If you have individually listed one (or more) of your kids or grandkids as designated beneficiaries of your 401(k) or IRA, that designation will usually override any charitable bequest you have stated in a trust or will. A will is NOT a beneficiary form. When it comes to 401(k)s and IRAs, beneficiary designations are commonly considered first and wills second.

Legacy Planning using Permanent Cash Value Life Insurance

The Perfect Solution for Wealth Maximization and Transfer to Heirs

Life Insurance is the most misunderstood product on the market today. When understood, designed properly and managed properly, Life Insurance is the most powerful financial product available today.

Life Insurance as Part of Your Retirement Planning Offers Several Advantages:

  1. Tax-Deferred Growth: Unlike many investments where income is taxable each year.
  2. Highly Leveraged Tax-Free Death Benefit: Protection that other investments cannot provide.
  3. Tax-Free Income: Properly structured, life insurance can provide more “living” benefits than any other investment vehicle.
  4. No distribution requirements or penalties: Unlike other tax-deferred investments that are subject to tax penalties for early withdrawals. And, there are no RMDs at age 70 1/2. You, not the government, decide when money comes out of the policy.
  5. No contribution limits: Life insurance can be funded with as much or as little as you want.
  6. Protection against long-term care expenses: Provided by policy riders for LTC.
  7. The Death Benefit Automatically avoids the costs and delays of probate. 

Retirement Planning using Indexed Universal Life Insurance

Life insurance can help protect your family’s financial security in the worst of times.

But did you know Indexed Universal Life insurance (IUL) can afford you powerful benefits in good times too?

IUL is a universal life insurance policy that provides a death benefit to help protect loved ones when you’re gone. It can also contribute to your long-term financial strategy with the potential to build cash value that can be used to supplement retirement income.

How does it work?

As with other forms of permanent cash-value life insurance, your premium payments earn interest and grow the cash value of your policy. But with IUL, your premium payments may earn interest at a fixed interest rate or a rate based on the performance of an external market index.

But because you don’t participate directly in the stock market your policy remains protected even if the stock market goes down. The credited interest rate on an IUL policy will never be less than zero percent… guaranteed.

So, why choose IUL?

IUL can offer financial security for the future in the form of a death benefit, as well as control of your financial plans through access to your cash value through partial withdrawals and loans that can be used to supplement your existing retirement funds. And, many IUL policies today allow you to accelerate a portion of the death benefit when certain conditions are met and the proceeds can be used to help fund the costs of long-term care.

And, if the policy is structured properly, the death benefit, withdrawals and loans and any accelerated death benefit proceeds received for long-term care expenses will be income tax free.

How to Assemble the Retirement Puzzle for Financial Peace of Mind