Estate Planning

Estate planning is challenging for everyone, but for high-net worth family’s, estate planning can be complicated. Constant changes in the financial industry can affect your family and business, making it difficult to protect inheritances, reducing corporate and personal tax, minimizing potential probate cost, and ensuring you have the right financial and legal professionals.

Your Professional Team

Your priority is ensuring that you are surrounded by the right team that will take care of your estate plan. Imagine a table with several seats. Which individuals are sitting in the financial planning, insurance, investments, legal, and accounting seats? Who are the power of attorneys and/or trustees? Who is your most trusted person? Trust, not cost, should be the issue.

Who is or will be looking out for you? If you do not currently have a team then get started building one. Inquire, interview and find those who will meet your needs. Discuss all your estate planning goals with these individuals and make sure they know what you want and expect from them. Remember, they are and will be representing you, your family, and your business.

Reducing your estate’s liabilities

You have worked hard to build value in your investments. You have successfully funded your retirement plan. You may not need all that you have acquired and so tax liability will become an issue. These liabilities will reduce the potential inheritance your beneficiaries could share. It becomes important to ensure that your estate plan will address these significant obligations and ensure that the liquid and fixed assets will flow to your designated beneficiaries.

There are several strategies that can be employed to minimize your income and probate taxes. Without planning, your estate could lose over 40% of its transferrable value. These tax burdens could force executors to liquidate specific fixed assets (ie. real estate) so that sufficient cash is generated. How will these asset liquidations affect the instructions of your will? The bottom line is there will be taxes to pay. How will you fund this liability?

The simplest solution to your tax burdens is having an available fund that will offset the future cost. You may consider self-insuring but only if you have more than sufficient assets to set aside and fund your retirement income requirements. Given all the uncertainty with health, self-insurance might not be your best option. Life insurance becomes the most viable solution. The cost will be a fraction of the actual tax liability but more importantly, this cash injection can be used for much more than paying taxes. Insurance will fund additional retirement income, fund future income for dependents, create estate equality, fund testamentary trusts, and other estate liabilities.

Removing health risk

If we look at the uncertainties we face, our health must be one of the most important. You have worked for over 4 decades and your accumulation is now more than sufficient to create your retirement income and pass the remainder along to your family. Nothing would be more devastating than your portfolio pre-maturely diminishing due to increased health costs. Your fear won’t be what will I pass along to my family. It will be if or when my money runs out.

Every retirement plan must address potential future health, not only from a financial perspective but also from a legal perspective. Who will be your Power of Attorney for Property and Healthcare? These attorneys will be able to manage your financial, legal, and health matters if your health causes you to become incapacitated. The individuals will be able to manage your bank accounts, investments, and loans; buy and sell properties; manage your mail; determine medical care and select long-term care options.

Health insurances like critical illness (CI) and long-term care (LTC) should be considered as ways to financially offset the potential risk of healthcare expenses. CI benefits are paid when individuals suffer from specific covered illnesses (ie, heart attack, stroke, cancer, Parkinson’s, Alzheimer’s, etc.). LTC benefits are received after individuals have lost two or more daily living activities (ie. Feeding, dressing, bathing, etc.). A carefully planned health insurance portfolio will protect retirement funds from early depletion and/or fixed assets from being liquidated.

Wills vs. Trusts

There is no this or that. Trusts exist for a reason and should be considered during your life as well as after. Multiple marriages, stepchildren, financial dependents and, the financially immature will create financial complexity to any estate and probably while you are still alive. It’s easier to manage finances when we are alive because we are in control of the funds. What about after we pass?

Aside from reducing probate costs, trusts will allow for better control of assets while you are alive and after you have passed. Your trustee(s) will be responsible for managing the investments and disbursement. There are certain legal and tax rules that you will have to become familiar with, however inter vivos or testamentary trusts are effective in helping you manage your money now and in the future.

Financial Success

Estate planning is not something that can be done by oneself. This article, while simple on the surface, barely touches the detail of legal and tax laws one needs to understand. Picture that table. Who is sitting with you and guiding you through all your legal, accounting, and financial matters? At Safebridge Private Wealth, we can look after the financial planning, investment and insurance seats. We will work with your legal and accounting teams to ensure that your investments fund your retirement on your terms. We will ensure that your potential tax liabilities are addressed and covered before they need to be paid. We will plan, with you, to make sure that your generational transfer will occur as detailed in your will. We will ensure that potential health issues will not impact your portfolio’s integrity. Most importantly, we want to become one of your trusted advisors.

Estate planning is challenging for everyone, but for high-net worth family’s, estate planning can be complicated. Constant changes in the financial industry can affect your family and business, making it difficult to protect inheritances, reducing corporate and personal tax, minimizing potential probate cost, and ensuring you have the right financial and legal professionals.

Your Professional Team

Your priority is ensuring that you are surrounded by the right team that will take care of your estate plan. Imagine a table with several seats. Which individuals are sitting in the financial planning, insurance, investments, legal, and accounting seats? Who are the power of attorneys and/or trustees? Who is your most trusted person? Trust, not cost, should be the issue.

Who is or will be looking out for you? If you do not currently have a team then get started building one. Inquire, interview and find those who will meet your needs. Discuss all your estate planning goals with these individuals and make sure they know what you want and expect from them. Remember, they are and will be representing you, your family, and your business.

Reducing your estate’s liabilities

You have worked hard to build value in your investments. You have successfully funded your retirement plan. You may not need all that you have acquired and so tax liability will become an issue. These liabilities will reduce the potential inheritance your beneficiaries could share. It becomes important to ensure that your estate plan will address these significant obligations and ensure that the liquid and fixed assets will flow to your designated beneficiaries.

There are several strategies that can be employed to minimize your income and probate taxes. Without planning, your estate could lose over 40% of its transferrable value. These tax burdens could force executors to liquidate specific fixed assets (ie. real estate) so that sufficient cash is generated. How will these asset liquidations affect the instructions of your will? The bottom line is there will be taxes to pay. How will you fund this liability?

The simplest solution to your tax burdens is having an available fund that will offset the future cost. You may consider self-insuring but only if you have more than sufficient assets to set aside and fund your retirement income requirements. Given all the uncertainty with health, self-insurance might not be your best option. Life insurance becomes the most viable solution. The cost will be a fraction of the actual tax liability but more importantly, this cash injection can be used for much more than paying taxes. Insurance will fund additional retirement income, fund future income for dependents, create estate equality, fund testamentary trusts, and other estate liabilities.

Removing health risk

If we look at the uncertainties we face, our health must be one of the most important. You have worked for over 4 decades and your accumulation is now more than sufficient to create your retirement income and pass the remainder along to your family. Nothing would be more devastating than your portfolio pre-maturely diminishing due to increased health costs. Your fear won’t be what will I pass along to my family. It will be if or when my money runs out.

Every retirement plan must address potential future health, not only from a financial perspective but also from a legal perspective. Who will be your Power of Attorney for Property and Healthcare? These attorneys will be able to manage your financial, legal, and health matters if your health causes you to become incapacitated. The individuals will be able to manage your bank accounts, investments, and loans; buy and sell properties; manage your mail; determine medical care and select long-term care options.

Health insurances like critical illness (CI) and long-term care (LTC) should be considered as ways to financially offset the potential risk of healthcare expenses. CI benefits are paid when individuals suffer from specific covered illnesses (ie, heart attack, stroke, cancer, Parkinson’s, Alzheimer’s, etc.). LTC benefits are received after individuals have lost two or more daily living activities (ie. Feeding, dressing, bathing, etc.). A carefully planned health insurance portfolio will protect retirement funds from early depletion and/or fixed assets from being liquidated.

Wills vs. Trusts

There is no this or that. Trusts exist for a reason and should be considered during your life as well as after. Multiple marriages, stepchildren, financial dependents and, the financially immature will create financial complexity to any estate and probably while you are still alive. It’s easier to manage finances when we are alive because we are in control of the funds. What about after we pass?

Aside from reducing probate costs, trusts will allow for better control of assets while you are alive and after you have passed. Your trustee(s) will be responsible for managing the investments and disbursement. There are certain legal and tax rules that you will have to become familiar with, however inter vivos or testamentary trusts are effective in helping you manage your money now and in the future.

Financial Success

Estate planning is not something that can be done by oneself. This article, while simple on the surface, barely touches the detail of legal and tax laws one needs to understand. Picture that table. Who is sitting with you and guiding you through all your legal, accounting, and financial matters? At Safebridge Private Wealth, we can look after the financial planning, investment and insurance seats. We will work with your legal and accounting teams to ensure that your investments fund your retirement on your terms. We will ensure that your potential tax liabilities are addressed and covered before they need to be paid. We will plan, with you, to make sure that your generational transfer will occur as detailed in your will. We will ensure that potential health issues will not impact your portfolio’s integrity. Most importantly, we want to become one of your trusted advisors.

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Magid Girgis

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