Estate Planning and The Forgotten Client

Over the past several years we’ve seen the estate tax exemptions jump from $1 million per person to now, temporarily, over $11 million per person.  Consequently, many estate planners have seen their practices scale back significantly because these larger exemptions translate to fewer people needing to do traditional estate planning.

But, that doesn’t mean these clients still don’t need planning of some sort.

Because of these exemptions increasing, we’ve seen clients with net worth’s in the $3 million to approximately $8 million range being left on the planning sidelines.  And yet, these clients need and deserve attention as much as any other clients.

In fact, it’s often these clients who are quite fearful of outliving their retirement nest egg and/or not being able to leave some sort of legacy.  Furthermore, they have grave concerns about the cost of care as they grow older.  Long-term care is front of mind for these clients.

Because of these fears, they end up not being able to enjoy their retirement for fear they will either run out of money or will spend it all on long-term care, essentially wiping out any chance of leaving a legacy.

Thankfully, there is a solution.

The Legacy Wealth approach solves all of these needs by providing financial security to these clients and to their heirs. How does it work?

Very simply, we reposition assets to acquire a life insurance asset for the benefit of both the clients AND the heirs.  It benefits the clients today because we design the coverage so that it provides ample LTC coverage, as well as a tax-free benefit to the heirs when the clients pass away. The insurance can be trust owned or owned individually.

The funding of the insurance is quite flexible. It can be paid in 1 lump sum or paid over 5, 10, or 20 years or even for a lifetime.  There are inherent advantages and disadvantages as to how long to fund, which can be addressed with each client.  But the end result is that funding the insurance asset does not impede on their lifestyle in retirement.

So, in the end, we have provided a substantial legacy to the heirs no matter how small the nest egg may have shrunk to at the client’s passing.  We have secured vital long-term care coverage for the clients so they can rest assured the cost of care will not bleed down their assets.  And, maybe most importantly, we have given the client’s peace of mind to know they can truly enjoy their retirement years without worry.  And that benefit clients tell us – is priceless.

The image below illustrates just how much life insurance can impact your net worth and preserve your legacy.  Click the button below, to see the details of how we arrived at this comparison.

Are you ready to discuss solutions and re-engage your “forgotten clients”? Fill out our contact form.

Mercury Financial Group does not provide tax or legal advice. All clients are urged to seek counsel on such matters.