Basic Strategies of Estate Planning

Steve Savant is a national insurance columnist, financial color commentator and host of the daily Internet talk show, The Business Insurance Zone. Steve's special guest, Louis Shuntich, JD Senior Vice President Advanced Planning, Advanced Marketing with Lincoln Benefit Life. On Wednesday's Show, Steve and Lou address some of basic planning strategies for estate planning that are common to many potential clients and can be used as a marketing campaign help an advisor build out their business and position their practice as a provider of product and resources in their community. There are several giveaways on the show throughout the series. You can order any of those at thebiz@brokersalliance.com or 1 800 290 7226 extension 147. Special Needs Trust: A properly drafted trust may be used to meet the child's needs without causing a loss of government benefits (most importantly Medicaid). This may be accomplished by including language in the trust that subjects any payments for the child's benefit to the trustee's sole discretion. Life insurance on the parents is the ideal vehicle for funding these trusts because the proceeds become immediately available when they are needed upon the parents' deaths. Estate Equalization The life insurance does not have to exactly equal the value of the business interest Avoid giving heirs passive interests in the business. Business Succession: The four basic transition planning strategies currently utilized: Buy/Sell, Cross Purchase, stock Redemption & Wait n See Trust. A contract that provides for the sale of a business interest upon a triggering event: Addresses issues such as: Events that trigger a sale, parties to the agreement, the purchase price - How and when the payments are to be made - How the price is to be funded. Keeps ownership with the desired parties. Provides a fair price for the business interest. Life insurance funding provides necessary cash. Creates a market for the business interest. Spendthrift Trusts: A spendthrift trust is designed to protect beneficiaries who can't handle the money. Beneficiary's creditors can't reach assets in the trust. Creditors can reach funds given to the beneficiary Solution - The trustee purchases goods and services for the beneficiary. Corporate Status: Sole Proprietorship, Partnership, C Corporation, S Corporation, Limited Liability Company.