What Aspects of Estate Planning will Help Secure My Financial Legacy?

By Jordan Loebel, JD, Asset & Income Protection Advisor

Family sitting at an outdoor table with young children

The volatility of the political, economic and regulatory climates makes it increasingly more difficult to ensure that a family’s liquidity needs are protected and perpetuated for future generations. When contemplating financial wealth preservation strategies, individuals who consult only with their financial wealth advisor often forget, or simply overlook, additional preservation strategies that are extremely cost-effective in helping to preserve the continuity of a family’s assets.  

Through the procurement of products such as life insurance, disability insurance and long-term care, you and your family can preserve the assets you’ve worked so hard to accumulate.

Preserve Your Assets with these 4 Vehicles

Life Insurance

Life insurance can ensure that a family’s assets are seamlessly transitioned to the next generation in a cost-effective and tax-efficient manner. With high net worth families, life insurance should be properly structured through an irrevocable life insurance trust to avoid severe estate-tax implications. Setting up an irrevocable life insurance trust is the best way to reduce or even eliminate estate taxes. Consulting with both your estate attorney and insurance advisor can help protect and perpetuate your family’s continuity.

Disability Insurance

Disability insurance is just as important. A permanent disability can often be even more detrimental to a family’s finances than an untimely death. When a key family member is no longer able to provide the financial support his or her family relies on, this individual can become a financial burden. Significant costs to cover daily needs and medical expenses are likely to be incurred as the individual works toward recovery. Procuring disability insurance can be an easy and affordable route to mitigate this exposure.

Long-Term Care Insurance

A long-term care strategy is equally important when planning for the unexpected. The need for extended health care can quickly drain assets meant for retirement and other goals and create a significant emotional and physical toll on loved ones and friends. The average annual cost of nursing home care is now over $83,000 for a private room. For an average claim of three years, the cost may total over $251,000. And even though seven out of ten people who live to be 65 will need long-term care at some point in their life, less than 8 percent of Americans have purchased long-term care insurance. While some individuals are choosing to self-insure, others believe someone else will cover this cost for them. The reality is, you can safeguard yourself for as low as $2,000 per year for a 55-year-old couple.

Umbrella Coverage

Personal excess liability coverage—an umbrella policy—protects an individual from incurring a devastating financial loss in the event of an adverse legal settlement. Consult with your CPA, attorney, wealth advisor and insurance broker to obtain the appropriate coverage, limits and program structure to ensure you have peace of mind in the event of a claim. Utilizing asset protection vehicles, implementing preventative measures, educating family members and employing a healthy dose of common sense can go a long way in protecting you.

A preemptive approach to planning for a myriad of known and unknown events ensures that your liquidity needs are met and your personal assets are transitioned in an efficient manner. Work with your advisors to plan for how much life insurance, disability insurance and long-term care you need; and determine for how long you’ll need it and what you can afford to pay.

By consulting with not only your wealth advisor but also your insurance advisor, CPA and attorney, you may be able to better protect and perpetuate your family’s assets for generations to come.

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