thelifesettlementnetwork.com » Financial Planner

Estate Planning Basics

Chris — Tue, 20 Oct 2009 12:38:05 +0000

While death is a subject that few of us care to talk or even think about, it is something that should be discussed frankly and clearly. Death is one of few things is life that is guaranteed, and doing the best we can to prepare for it financially and legally is a very important decision. Estate planning involves the preparation of a will and living will, as well as a trust in many cases.

Your will is a written statement of how you wish your assets and other things to be handled in the event of your death. Creating a will can help your loved ones act in a time of grief by outlining your funeral and burial wishes and by giving them a direction to move in to help settle your estate. A living will, or advance directive, gives someone medical power of attorney for you in the event that you are in a coma or otherwise unable to make your own medical decisions. For many seniors, a living will is the only way to ensure that you are treated as you wish to be in the event of a prolonged illness or serious medical condition.

A trust is an agreement that acts much as a will, giving your assets and properties to third parties. Ownership is transferred while you are alive, however, meaning that the estate will not have to go through probate court after your death. For people with multiple assets, a trust is a very important legality.

To put it simply, estate planning is very important. In the event of your death, your loved ones will need a clear idea of how to handle finances and property. By setting up a will and trust, you can make your wishes clear, ensuring that your property and assets are disbursed in the way that seems best to you.

Disbursing Life Insurance as a Trust for Minors

Chris — Mon, 12 Oct 2009 12:14:17 +0000

When setting up a disbursement arrangement for a life insurance policy, many of us certainly attempt to provide for children and grandchildren. Leaving insurance money to a minor can be a logistical nightmare, however, and there is a great deal of red tape that must be maneuvered. So how exactly can you do this without creating a financial nightmare for everyone involved?
One solution is certainly to hire a lawyer to act on behalf of the child, but this is costly and you will have no means of defending yourself against excessive charges. The simplest answer is to name a family member as executor of the funds, ensuring that they are able to sign all legal documents relating to the funds on behalf of the minor child. It is customary to offer some sort of monetary gift to reimburse the person for the burden, but it is not imperative.
Many seniors worry about leaving so much money to a child at once, or about placing control of the money in the hands of another party, whether or not they are related. The best solution to this is to set up a trust beforehand, ensuring that the funds are paid at certain times, rather than in one lump sum. This can prevent reckless spending on behalf of anyone involved and can help ensure that your child or grandchild is taken care of on a long term basis.
Leaving your policy or other assets to a minor is possible, and can be a wonderful decision. You will simply need to exercise a bit of caution when doing so. Taking the steps needed to ensure that your loved ones are cared for is always a good idea, and creating a trust or naming a trustworthy executor can always help to ensure that your assets and their disbursal are handled properly.

What is my policy worth?

Thu, 22 Jan 2009 08:44:29 +0000

Usually the first question seniors ask after hearing that their life insurance policy may be worth much more than the cash surrender value is “How much is my policy worth?”

The calculation is simple enough: Determine the insured’s life expectancy and multiply that by the annual premiums to estimate the expected cost of maintaining the policy. Subtract the result from the discounted future value of the policy.

Your policy is worth the difference after fees.

Everyone uses the same companies for projecting life expectancy, but discount rates and existing portfolio composition vary among investors. For this reason it is always a good idea to have many investors bid on your policy.

Fees can also differ a great deal among agents, brokers, investors and advisors.

A couple tips:

When evaluating a life insurance settlement, look for a free quote or calculation. The settlement process should be clear and transparency of fees (who gets paid what) is non-negotiable. A session with a licensed fee-based financial planner is recommended. A fee-based planner will recommend the best course of action for you without the incentive of commission.