Estate Planning as C19 Continues: What You Need to Know (Guest Blog Post)

Estate Planning as C19 Continues: What You Need to Know

Dara R. Cohen

D. R. Cohen Law, LLC

Estate Planning & Probate

(801) 616-2178 dara@drcohen-law.com

As the Covid-19 pandemic persists, we are thinking about worst-case-scenarios for our

families, disabling illnesses, and mortality. Is this the right time to create your estate plan?

If you didn’t need an estate plan before, you probably don’t need one now.

If a person does not own real estate, does not have dependents, has beneficiary

designations on all financial assets, and is not concerned about incapacity planning, they do not

need an estate plan. Estate planning is less urgent than for someone with more complex assets or

dependents that would be at risk.

But everyone should have an Advanced Health Care Directive.

Everyone should have an Advanced Health Care Directive. Utah’s standardized AHCD

is easy to complete without an attorney. It allows you to name an agent who makes medical

decisions for you if you cannot communicate and makes end-of-life medical decisions.

After deciding you need an estate plan, start by understanding the difference

between a Will and a Trust.

A Will is a one-time distribution of your assets when you die. All assets controlled by a

Will must pass through the Probate Court. A Will costs less now and more when you die.

A Revocable Trust is a metaphorical shoebox into which you transfer your assets now.

You, as Trustee, manage and control your Trust while you are alive and have capacity. When

you are incapacitated or dead, the “shoebox” slides to your Successor Trustee who manages

assets for your benefit and distributes assets to your heirs. A Trust costs more now and saves

both time and money later when you are incapacitated or dead.

Consider the services offered by your attorney, including remote sessions and Trust

Funding.

Ask if your attorney provides remote sessions and/or home visits to minimize the need

for unnecessary trips outside the home.

Ask if your attorney provides Trust Funding - transferring assets into your Trust and

updating your beneficiary designations. This additional legal service eliminates your need to

visit financial institutions, brokers, insurance agents, and the County Recorder.

Revisit your existing estate plan to ensure it reflects your wishes and conforms to

new laws.

If you already have an estate plan in place, revisit the documents every 2-3 years to

review your heirs and the people you appointed to carry out your wishes.

Tax law changes in 2018 and 2019 altered estate tax limits and distributions from

retirement accounts after the account owner dies. These changes could impact your estate which

may need updating.

Four Simple Steps to Buying Life Insurance

Four Simple Steps to Buying Life Insurance.

It can seem difficult at first, but it can actually be an easy process if you follow these simple steps.

Step 1: Find yourself a trusted life insurance broker. A broker can find you the best policy and best pricing on the market. Since the broker has access to a multitude of companies, instead of just one, it gives you the best chance at finding the best product for your needs.

Step 2: A trusted life insurance agent will do a fact finder to narrow down what your exact needs are. They will explain to you how the different types of life insurance products work, so you are better educated to make the proper decision. After verifying your needs, the agent will make a professional recommendation. They will help you determine which product makes most sense to you. With life insurance, there are two basic types of insurance policies to choose from, and your agent should be able to explain how they work for you in detail. Choosing the proper insurance product is a team effort between you and your agent.

Step 3: Be sure your agent chooses for you a reputable company. The insurance company you choose should have been in business for many years, be financially stable and have strong ratings.

Step 4: Choose how you want to buy. There are many safe ways to buy a life insurance policy especially during this time of Covid-19. Your agent should give you the option to either meet in person (if possible), do the appointment by phone, or do a video meeting online i.e. Zoom. More and more of these meetings are moving to video platforms for the safety and convenience of all parties.

Buying life insurance can be a simple choice with lasting value. Don’t leave your family or your business unprotected, make the decision that can help keep them covered today.

Top 5 Reasons You Need Life Insurance

OK, let’s talk. I know, talking about life insurance usually isn’t the most fun thing to talk about, but it is one of the most important aspects of your financial plan if not the most important. Talking with an expert regarding these matters can surely help lighten the load with what is needed to make a good decision in these matters.

I have been very lucky to know and meet a lot of absolutely wonderful people from all walks of life. And with knowing many people, your chances go up with knowing more people that have passed away. It is always hard to see friends and family stress about money during trying times like this. Seeing many of these types of circumstances is one of the many reasons why I chose to get involved in the life insurance industry. I am passionate about helping people get prepared, so when the unexpected happens, family and friends will not have the financial stress that comes shortly thereafter.

This article will outline just 5 of many reasons why you should have life insurance as part of your financial plan.

     1. Funerals aren’t cheap.

According to the most recent data from the National Funeral Directors Association, the average cost of a traditional funeral, including embalming and a metal casket, is almost $6,600. From my research, that represents a more basic casket. Most statistics out there say it is usually closer to $10,000 and in many cases higher. Most people don’t have an extra $6k-$10k or more to dedicate to funeral costs so they usually have to draw money prematurely out of a 401-k, savings, fundraise for it or go into debt paying for it. Don’t leave it to your family to deal with the added stress of coming up with money to pay for the funeral.

2. Take care of business.

Life insurance is a very important part of the small and large business equation. Having been a business owner throughout my life, I can relate with the stress of wondering what would happen if the unexpected took place. Ask yourself some of these questions: What would happen if a key employee dies or becomes disabled? What happens to my business and my family if I die? What happens with the structure of the business if a business partner dies? These are just a few things to think about when owning a business and to take the proper steps in protecting yourself and those dependent upon you.

3. Supplement retirement.

How do you supplement retirement with life insurance you may ask? Certain life insurance policies (Whole Life) in particular, have both a death and a living benefit. These types of policies can accumulate cash that can be borrowed at a later time for cash needs. These types of policies are also usually protected from creditors, have a premium payment that is guaranteed to never increase, tax-free access to your funds as well as a myriad of other features and benefits.

4. Peace of mind.

Having a life insurance plan gives you the piece of mind that whatever happens to you, that you have a plan in place to care for loved ones that are left behind. You can also allocate some of the proceeds to your favorite charity if you wish. Just knowing that business will be taken care of and that you are leaving a legacy behind is a good feeling to have.

5. Nobody gets out of this world alive.

My grandmother used to say this and it made light of a sad situation. With this obvious knowledge, it is nice to have a plan in place that will not only take care of funeral expenses, but also pay off debts, a mortgage, take care of rent for a couple of years, pay for a college education, and the list goes on. In addition, life insurance is usually a lot cheaper than you think.

Don’t hesitate on getting something set up to protect the people you love. It can make all the difference in the world.

Do You Have Trusted Advisors On Your Team?

Every business owner needs a team of trusted advisors.

If you’re a business owner, you are used to wearing a lot of hats. Still, you can’t be an expert at everything, which is why it’s important to build a network of trusted professionals that you can turn to for help whenever the need arises.

No matter how successful you are, there are plenty of reasons to establish a professional network. In addition to exchanging contacts and referrals, there’s also the opportunity to share ideas and receive free advice from specialists in their field. And, much like getting a second opinion on a medical procedure, your network can act as a system of checks and balances by making sure you weigh all your options.

Ask yourself: Whom should you invite to be part of your network? While the members may vary depending on your strengths and weaknesses, your team should probably include some—or all—of the following professionals:

Attorney: Unless you have in-house council or a legal background yourself, an attorney—especially one with some experience in your industry—is almost a necessity. Among other things, an attorney can help defend you and your company from potential lawsuits, review contracts, and help with succession planning.

Accountant: While most people only use their accountant during tax season, business owners will find that an ongoing relationship can save them money in the long run. Not only can an accountant keep you from running afoul of the IRS, they can also show you how to structure your business and become a more tax-efficient operation.

Banker/Financier: As we all know, cash flow is the lifeblood of any business. And in today’s restrictive lending environment, having a banker in your corner can be a real boon. By providing easy access to credit, or letting you hear about the most favorable rates, a banker can be an invaluable addition to your team.

Insurance agent: A professional insurance agent can help you prepare for a number of critical business issues. Specifically, an insurance agent can help your business overcome the loss of a key employee, enhance your executive benefit package, fund a buy-sell agreement, and protect your family’s future by insuring your business interests.

As you can see, there are a host of advantages to creating a network of professionals with expertise in their field. Best of all, it’s a win-win for all parties, so setting one up may be easier than you think.