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5 Estate Planning Tools
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 take a look at each of the following estate planning tools. See the below average number of people out of ten who do not have each tool.
Will
1-2 People WITHOUT
WHY YOU WANT THIS:
Without it…
• The state decides who gets your assets at death
• The state decides who gets custody of your minor children
Marital Trusts
5-6 People WITHOUT
WHY YOU WANT THIS:
In general, to save on estate expenses…
• maximize estate tax exemptions
• avoid costly probate (up to 4-10% of the entire estate)
• protect certain assets from the government as a set off for long-term care expenses
Irrevocable Life Insurance (ILIT)
7-8 People WITHOUT
WHY YOU WANT THIS:
Life insurance proceeds pass to the beneficiaries free of income tax and free of estate tax.
Durable Power of Attorney (DPA)
5-6 People WITHOUT
WHY YOU WANT THIS:
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).
Family Limited Partnership (FLP)
9-10 People WITHOUT
WHY YOU WANT THIS:
FLPs help to protect assets from creditors and to help reduce gift and estate taxes when transferring assets to family members.
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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