Do We Need to Update Your Estate Plan Strategy?

Strategies to Enhance Your Success

By Cory Howes

Estate planning is complex and continually evolving. That’s why our team is committed to staying up-to-date on the newest and best strategies that can be applied to estates large and small.

Here are a few techniques to consider when evaluating if your estate plan needs an update

Maintain an up-to-date, trust-centered plan

The foundation of your estate plan must achieve your goals and needs.  Wealthy people tend to utilize estate plans with all assets funded into or aligned with trusts. Not only should your estate plan be trust-centered, but it should also be continually updated as your life, family circumstances, and the law grow and change. Make sure your current estate plan always reflects your goals.

Create special trusts for special assets

There can be many legal and tax opportunities presented by unique assets or investments. Many types of assets, such as IRAs, life insurance, business ownership, and more, require specialized planning to work properly in your estate plan.

If you’ve saved for retirement, you know the value of an IRA, a 401(k) or another retirement plan. You are probably also familiar with the beneficiary designations for these plans. But, you may not be familiar with a specialized trust, called a standalone retirement trust or IRA trust. This trust lays out exact instructions about where the money in your IRA will go after you’re gone. If you’ve seen substantial accumulation in your IRA, you may not want its entirety to be disbursed to a beneficiary all at once. You’ve worked a lifetime to save, and the IRA trust empowers you to protect what you’re leaving behind.

In a similar fashion, life insurance trusts give you more control over your life insurance benefits, allowing you to direct what occurs to your life insurance policy in more detail than is possible with a plain beneficiary form. It can be risky to name your minor children as the beneficiaries of your policy. If your children are not yet adults, the insurance company often requires a court-appointed guardian to receive the funds, a potentially costly and lengthy process. Many people may decide to leave the policy benefits directly to the children’s caretaker to avoid this guardianship issue. But, leaving the policy benefits to your children’s caretaker outright doesn’t ensure that the money is used for the benefit of your children. A life insurance trust can protect what you’re leaving behind and ensure it is used for the benefit of your beneficiaries.

Unlike a plain beneficiary designation, a trust also lets you designate specific uses for your money by your beneficiaries, such as educational funding. Don’t leave these things to chance ­­­– instead use proactive trust-centered planning to achieve your goals and protect your family.

Build a collaborative professional team

People who are successful with their wealth goals rarely plan and work with professionals in isolation. They know they can get better outcomes by meshing their legal, tax, and financial plans together. Rather than silo their strategies with various advisors, they ensure their team is optimizing their results through a collaborative approach.

As you build out your team, seek out professionals who are enthusiastic about working with one another across disciplines. The more visibility they have into one another’s strategies, the better they’ll be able to provide you with the best possible benefits.

The estate planning team at Forrest Firm is experienced in these techniques, and we’d be honored to help you implement them. Call us today, and we can discuss the best ways to put these and other estate planning approaches into action for you.