“A" stands for the Accumulation of asset values

As we stated in our prior post, estate planning really begins with the Accumulation of asset values. That is what we all spend a good part of our lives trying to accomplish, some of us more successfully than others; but all of us have undoubtedly been successful at least in creating an estate at our deaths by purchasing the life insurance necessary to meet our needs and desires for our families.

Planning for young couples

For young couples, life insurance provides essential family protection in the event of premature death and builds an instant estate. It thus represents the first essential step in the client’s overall estate planning process. In order to provide the largest death benefit with limited available funds, most life insurance purchased in these situations is, quite properly, term insurance, but it is always a good idea to try to incorporate some permanent coverage into the package as early as possible, perhaps a carrier- guaranteed universal life policy.

The beneficiary designation

Regardless of the type of policy, however, all too often not nearly enough attention is paid to the policy’s beneficiary designation, even though that designation represents the estate plan for what is typically the client’s single largest estate asset. How often do we simply name the spouse as primary beneficiary and the children as contingent beneficiaries, without giving adequate thought to how this large sum of money will be managed if both the insured and the spouse die leaving minor children? Without other proper arrangements made in advance, this will generally result in a court-appointed guardian, which is not only expensive, but also very time-consuming and cumbersome.

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Many people think that estate planning is only for the wealthy or only for older individuals. They may also feel that it is much too complicated and expensive.

Nothing could be further from the truth!

Bob Burton breaks down estate planning into its essential components — the A-B-C-Ds of Estate Planning. Utilizing this breakdown will give your clients the ability to view their estate planning with a wide angle lens.

A. = Accumulate

Estate planning really begins with the Accumulation of asset values, and actually occurs every time you write a life insurance policy.

B. = Benefit
When sufficient net worth has been achieved and family obligations permit, one should think about reaping the Benefits of one’s wealth accumulation efforts with careful and thorough retirement planning.

C. = Conserve
The uncertainties of life and aging coupled with the high cost of dying make it necessary to take active steps to Conserve your accumulated property for yourself and your family during your lifetime, and ultimately for your heirs and beneficiaries.

D. = Distribute
The final step in the estate planning process is to arrange for the desired and orderly Distribution of your estate to the chosen objects of your bounty; even the beneficiary designation in a life insurance policy or for retirement plan assets is an act of estate distribution of those assets.

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