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Do You Need an Estate and Asset Protection Planning Checkup?

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As a general statement, most of the general public who earn a good living and/or have amassed wealth do not have the proper estate plan or asset protection plan.

As a general statement, most of the general public who earn a good living and/or have amassed wealth do not have the proper estate plan or asset protection plan.

The following are statistics about the more affluent general public* when looking at a group of ten.

– 1-2 will NOT have a simple will

– 6-7 will NOT have Durable Powers of Attorney

– 5-6 will NOT have marital living trusts

– 9-10 will NOT have a Family Limited Partnership (FLP)

– 9-10 will NOT have an Irrevocable Life Insurance Trust (ILIT)

*Provided by the Wealth Preservation Institute

The need for estate planning documents is obvious.

-You need a will, especially if you have minor children, to make sure the appropriate people receive custody of the children in the event of a terrible accident killing both parents.

-You need durable powers to make sure the living spouse or other loved ones do not have to go to court to make life sustaining decisions or to sign legal documents for someone who is incapacitated.

-Living trusts are needed to maximize estate tax exemptions and to avoid probate.

-FLPs are needed to centralize governance of family assets and discount the value of the estate for estate tax purposes.

-An ILIT is needed to pass the death benefit to your heirs estate tax-free.

If you do not have the above-mentioned tools, you need a checkup.

What about asset protection planning? Ask yourself the following questions:

1) Do you have real estate owned in your own name?

2) Do you own stocks or bonds in your own name?

3) Do you have significant equity in your personal residence and do not live in a state like TX or FL which asset protects the home’s value?

4) If you have a boat, wave runner, snow mobile, plane, etc., are they owned by a multi-member LLC?

If you answered no to any or certainly most or all of the above questions, you are in serious need of a checkup.

What about tax planning? Ask yourself the following questions:

1) Are you paying too much in income taxes?
2) Do you have highly appreciated real estate or stocks you would like to sell but don’t because of the capital gains taxes?
3) If you own a small business, are you using tools like the Super 401(k) plan or captive insurance companies to reduce your income and fund tax-favorable benefit plans?

If you answered yes to 1 and 2 and/or no to question 3, you are in need of a checkup.

Here is an interesting question: Do you think your current team of advisors are familiar with the following topics?

The use of domestic LLCs, FLPs and Offshore Asset Protection Trusts, The Maximizer, “Freeze” Partnerships, The Leverage Bonus Plan, Section 79 Plans, Equity Harvesting, Fixed Indexed Annuities, 401(k) Plans, New Comparability Profit Sharing Plans, Defined Benefit Plans, 412(e)3 Defined Benefit Plans (and carve out plans), 401(h) Plans, ESOPs, Life Settlements, Reverse Mortgages, Indexed Universal Life Insurance, Charitable Remainder Trusts, Charitable Gift Annuities, Family Foundations, Qualified Pension Insurance Partnerships, Intentionally Defective Grantor Trusts, Long-Term Care Insurance, HRAs, Drug Carve-Out Plans, Section 125 Plans, HSAs, Corporate Structure and many more topics.

If your advisors are not familiar with the above, you are in need of a checkup!

The biggest dilemma I’ve found today when talking with clients is that they have no idea who they should turn to in order to second guess the advice their current advisors have given them. The next dilemma is that, if a client could find a knowledgeable advisor, the bill to receive a checkup would give most clients sticker shock ($2,500+).

For my clients, I provide for them a free review of their situation. When you have the requisite knowledge on the concepts listed above and work with a team of experts from around the country to help clients implement plans, providing a review of someone’s situation is quite simple (and usually very eye opening to the client).

If you know you need a checkup, and my guess is that 99% of the people reading this newsletter can benefit by one, please contact me using my contact information below and set up a time when we can discuss your asset protection and estate plan (or lack thereof).

We review your financial life from the ground up. Rethink it and rebuild it.