Estate Planning – If There Is A Will, There Is A Way
Feb 24, 2011 Estate Plan Trusts
More than just creating a last will and testament. It is about creating peace of mind that you can share with your family and loved ones, secure in the knowledge that everyone’s interest are protected.
Many consider estate planning to be something done by the wealthy, soon to retire or those with many dependents. However, this is not the case, is essential for people of all ages regardless of your wealth or number of dependents. Whenever there are assets and liabilities involved, you need the assistance of a financial planner to create an estate plan.
Generally was defined as “the planning and documentation of the wishes of a person for the distribution of all assets under the control of that person following death “. As estate planning has evolved so has the definition. Today estate planning is a much more dynamic process which can be defined as the planning, development and documentation of strategies for:
1. Protecting the income capacity of those that depend on you.
2. Protecting your wealth against legal claims of others.
3. Ensuring the last will and testament and other legal documents meet legislative requirements to successfully execute your wishes.
4. Ensuring your affairs are settled according to your wishes while taking into account the needs and circumstances of your beneficiaries.
5. Effectively distributing your wealth to minimise tax.
6. Eliminating the possibility for disputes and challenges.
7. Formally appointing a person to manage your legal, financial and personal affairs.
8. Effectively transferring control of your business, investments and non-estate assets.
9. Reviewing and updating your estate plan and documentation to keep all aspects current and aligned.
Estate planning and drafting of your last will and testament has many advantages but similarly presents many challenges. Some of the challenges include having to face one’s own mortality, difficulties discussing it with one’s family and the complex issues and regulations that surround the estate plan and your last will and testament.
Your financial planner can play and important part in your estate plan and drafting of your last will and testament. Your financial planner usually has in-depth knowledge of your current financial situation as well as an understanding of your personal and business financial objectives. Your financial planner can advise you on how best to structure your estate to meet your needs and wishes. Additionally, your financial planner will be able to give your family financial advice and help with the execution of your wishes. Your financial planner also plays a valuable role by referring you to other professionals such as tax specialists, lawyers, life insurance brokers and any other areas you may need more specialised advice.
Tags: Estate Plan Trusts
Benefits of an Irrevocable Life Insurance Trust
Sep 25, 2009 Estate Plan Trusts
After an exhausting day at work all you desire is a moment of silence, instead, all you do is just retreat in your own home and start thinking about your family, your children’s hopes and needs, when, you might think of establishing an irrevocable life insurance trust.
Since your life goal is to secure their future, these thoughts can get over your head sometimes, so why not start looking for solutions? An irrevocable life insurance trust might be the perfect answer.
Making an idea of how it works and most of all, understanding its benefits is a must. You should contact a specialist and ask him / her to give you some advice in order to begin creating a trust. Investments coupled with insurance has become one of the most common ways that people use to their wealth planning, including wills or any other amounts of money.
Once you decide to go on with your plans, you should know a few things about the irrevocable life insurance trust as well as some of its benefits. The main purpose of the irrevocable life insurance trust is to reduce the size of your estate, and thus your estate tax liability. You will be able to protect your life policy’s value from any creditors and also to know how or when your trustee(s) get the income.
In other words you will be transferring the investment insurance ownership to your spouse or children who are being defined as the trustees. Thus you will no longer be the owner. Hence, when you die, the insurance proceeds will be deposited for the benefit of your followers.
When creating a trust you must be aware that there are some possible risks that you have to take into account. For example, if you have a life insurance policy that you own, it will be taxable upon your death, but if you don’t own it, you can’t change it or even cancel it.
If one chooses to leave his/hers insurance proceeds to a spouse, it will eventually, not be charged but the living spouse’s estate will be taxed. Creating a trust offers you the opportunity to avoid some taxes, but notice that if the insured dies within three years from the day that the policy had been signed, the proceeds will be taken into account for tax object.
All in all the irrevocable life insurance trust is a good choice for every family. It’s a clever way to protect your savings. The best way is to let your legal advisors / attorneys do their job in your best interest.
Tags: Estate Plan Trusts
