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Expert Interview: Life Insurance & Your Estate Plan

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Two people looking at sunset

When you think about estate planning, life insurance doesn’t come to mind first. Your house, collectibles, and 401k? Sure. Yet, life insurance is present in almost every quality estate plan and can serve as a source of support, coverage, and liquidity to pay death taxes, expenses, fund business buy-sell agreements and sometimes to fund retirement plans. A life insurance policy, when used correctly, can be used to protect your estate and ensure your lasting legacy. Yet, for even the savviest of people who have a plan in place for the future, how life insurance fits into the estate planning puzzle can prove complicated.

puzzle pieces all mixed up

Enter Christa Payne, a Financial Representative for Country Financial in North Liberty, who was generous enough to share her expertise on the subject. Christa has been with Country Financial for over seven years and you can tell she’s passionate about what she does. She finds joy in being a part of planning for the future for all her clients.

Christa Payne
Gordon Fischer Law Firm (GFLF): In general, what role does a life insurance policy play within an estate plan?

Christa Payne: Generally, life insurance is a great vehicle to provide estate liquidity (in order to pay taxes, debts, administrative expenses, family allowance for surviving spouses and dependents). It can also provide debt relief or continuation plans (buy-sell for businesses, etc.), provide income replacement, and wealth accumulation…proceeds are paid to beneficiaries income tax-free!

GFLF: Can life insurance affect the amount of taxable assets of the estate?

CP: Yes, if you are the owner of the policy, it gets added into estate calculation (up to $5.49 million as of 2017). However, if you give up rights to the policy for longer than three years, it doesn’t have to be included. There are steps you can take to make sure that the death benefit or the replacement value don’t get included in the estate calculation.

GFLF: What are the options for charitable giving with/through a life insurance policy? Can you “give” or transfer your policy to a charity?

CP: Premiums can be deductible, but the owner and beneficiary both have to be the charity. Yes, you can transfer your policy to a charity or purchase a new one. Life insurance can be a great way to turn a smaller cash donation into a larger donation!

GFLF: What are some errors you’ve heard of/seen in regards to life insurance and estate planning? What should people know to avoid these pitfalls?

CP: There are many errors that can be made, including: listing the wrong beneficiary (or failing to update as things change—beneficiaries trump a will!) and having an inadequate amount of coverage in force are two major ones. People should always meet with a competent financial professional and attorney to discuss their life insurance and estate plan. It’s vital to complete annual reviews of the policy, as simple as that seems, things change, and it’s easy to forget. It’s always great to be reminded of what policy you have, how it works, and what will happen in the event of a death.

GFLF: What’s the difference for life insurance between revocable and irrevocable trusts? Is one category recommendable over another?

CP: In a revocable trust, there is no gift tax on funding the policy and it avoids probate. The death benefit, however, is included in the grantor’s gross estate. In an irrevocable trust, it avoids probate, has asset protection against creditors, and is excluded from gross estate. One is not necessarily better than the other, it depends on the specific needs of each individual client at the time the trust is established.

Let’s Talk About Your Life Insurance

Take it from Christa, life insurance as a part of your estate plan is important. If you have questions on her advice or think you need a new/updated policy, don’t hesitate to give her a call at 319-626-3516 or shoot her an email. (A resource like this research can also be useful in comparing insurance plans.)

Of course, you also need an estate plan before life insurance an be a part of it)!  Contact me to get started or fill out my obligation-free estate plan questionnaire.

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Estate Sale? No. It’s an Estate Plan Sale!

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estate plan sale

WHAT IS AN ESTATE PLAN SALE?

For a limited time only (June 15 to July 15, 2017), you can receive a standard estate plan (which consists of six “must-have” estate planning documents) for only $500 (five hundred dollars). You will be billed only at the conclusion of this process, when you are executing the documents. So, obviously, you won’t pay anything until you are completely satisfied with both the plan and your understanding of the plan.

man working at desk on computer

What if you need or want, something more than the standard estate plan? Like, say, a revocable living trust? A standard estate plan, including a revocable living trust, will only cost you $1,000 (one thousand dollars). A revocable living trust accrues several benefits, including avoiding probate; saving costs, taxes, and fees; getting bequests to beneficiaries more quickly; and privacy.

I should note that either package comes with as many consultations (meetings, emails, and phone calls) with me as you reasonably feel we need to finish your estate plan. Again, you’re not sitting down to execute the documents, and so you’re not being billed (let alone paying anything!), until you are completely satisfied with both the process and the results of the process.

Gordon Fisch Estate Plan

WHY?

Why have an estate plan sale? Several reasons, actually.

To begin, the mission of my law firm is to promote and maximize charitable giving in Iowa. Straight up, the more estate planning Iowans do, the more charitable giving will occur.

Sure, not everyone who constructs an estate plan uses it to give to charities, but many do. Again – it’s simply a numbers game; the more estate planning, the more money flowing to worthwhile causes.

Also, 60% of Americans don’t have a will/estate planning. I want to help combat that statistic in Iowa. We can do better. Working together, we will do better.

Grandpa face

Finally, everyone deserve access to a secure future and a legacy. For these reasons, I’m offering very special rates.

HOW?

How much money are you saving? Quite a bit actually!

Speaking very generally, an estate plan from my Firm usually costs a single person about $700, and a family about $850. So, under this Estate Plan Sale, that’s a saving of about $200 for singletons to $350 for your family!

Family: mom, son, and dad

Also, speaking very generally, an estate plan including a revocable living trust, from my Firm, usually costs a single person about $1,300, and a family about $2,200. So, under this Estate Plan Sale, that’s a saving of about $300 for singletons and a whopping savings of $1,200 for your family!

WHERE?

Any Iowan is eligible. I am licensed to practice law in Iowa, and I have clients all over the state. In our modern age of emails, scanning, and cell phones, mere physical distance is not an issue.

I have clients from Burlington and Carroll to Sioux City and Urbandale. If you want to work with me, I want to work with you, and we can easily find ways to do so.

HOW?

I write about my process at length, but it’s just five steps! Seriously, it’s not that painful, it truly isn’t. My clients report back to me that they have such relief and peace of mind when it’s completed.

Peace signs at the golden gate bridge

WHEN?

NOW! RIGHT NOW!

Again, the special deal of $500 for a standard estate plan, and $1,000 for a standard estate plan plus a revocable living trust, will last only a limited time, June 15 to July 15, 2017. I’m already backlogged, so ACT NOW. Do not wait!

We all know, of all the seasons, summer goes by the fastest. Time can run out on you; don’t let that happen.

You can reach me most easily by email at gordon@gordonfischerlawfirm.com or call my cell, 515-371-6077. Don’t delay—write or call today.

A great place to start in on the process is with my Estate Planning Questionnaire.

mom and son on street

DISCLAIMERS

The Estate Plan Sale merely relates to pricing and in no way creates an attorney-client relationship, nor any other kind of professional relationship. The Estate Plan Sale merely relates to pricing and does not create a contract or agreement of any kind.
GFLF, P.C. retains full and total discretion as to who it chooses to serve as clients and why. GFLF, P.C. retains the right to refuse service to anyone it chooses.
The Estate Plan Sale may not apply to individuals or families with a net worth of more than $1 million dollars. (You still need an estate plan, very much so, but it necessarily needs to be much more “complex.”).
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S-Town and the Case for an Estate Plan

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s-town theme

Let’s be honest, the topic of estate planning can be a little, well, dry. Every lawyer, financial advisor, real estate agent, and the like will encourage you to have a quality estate plan professionally drafted, but it tends to be one of those things you’ll get to eventually. Life happens, work piles up, your to-do list grows longer and deciding what you want done with your remains after you die seems like a worry for another day. But, once in a great while a story comes up where the topic of estate planning is so necessary and uniquely integrated that it’s hard to ignore—cue the buzz-worthy podcast, S-Town. The podcast broke a record with 10 million downloads in four days, so don’t just take my word for it.

S-Town header

Caution: A few spoilers ahead

If you haven’t listened to S-Town and don’t want to know ANY details of what unfolds, stop reading now. Go listen and then come back to read how S-Town exemplifies some of the key reasons you need a will ASAP.

The highly bingeable story from Serial Productions (masterminded by the producers at This American Life and Serial), takes place in a small town in Alabama. As This American Life producer Brian Reed dives into what appears to be a true crime story, in line with the first season of Serial, the tale takes an unexpected twist following an unanticipated death.

Brian Reed

Brian Reed, S-Town

The person who passed away didn’t have an estate plan. At first this may not seem like a big deal, but without a last will and testament, the individual’s death left a wake of conflict and confusion. Without an estate plan, a mother with dementia is left without defined care and guardianship; 13 dogs are left without a pet trust to declare who will care for them; property is fought over; a felony charge is issued; a religious funeral is held despite the deceased’s atheism; a house and land are sold, likely against the wishes of the individual if they had been alive; an immaculate, amazing garden maze will be destroyed; and because the deceased was “unbanked” there were no cash assets to pay for a funeral and other important costs. This person had verbally told some people what he wanted them to have in terms of property and monetary assets, but there was no written record, and such hearsay doesn’t hold up in a probate court.

S-Town maze

S-Town is not only an example of excellent storytelling, but also a real world example of what can happen when someone dies without putting in place clear directions and wishes for property, cash and non-cash assets, pets, health care, and final disposition. You don’t want your family and friends to fight, press charges, and dig up your property in search of gold when you die. So, there’s no day like today to have your estate plan drawn up.

A good place to start is with my obligation-free Estate Plan Questionnaire.

Already have an estate plan? Good. It’s probably time you reviewed and updated it.

Feel free to contact me any time to discuss further how to start an estate plan. I offer a one-hour free consultation, without any obligation. I can be reached any time at my email, gordon@gordonfischerlawfirm.com, or on my cell, 515-371-6077.

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