Unique Challenges to Estate Planning for Non-Citizens with U.S. Assets

October 2, 2024

There are unique challenges to estate planning for non-citizens with U.S. assets. Non-citizens’ estate planning isn’t something that all estate lawyers are ready to handle. However, avoiding an excess tax burden is important. However, the right help can drastically reduce your tax burden and increase what you leave behind to loved ones.

One of the most important factors to consider regarding estate planning for non-citizens is residency status. The U.S. estate tax laws apply differently to residents and non-residents. Guardian Life shares that U.S. citizens and residents are entitled to a significant estate tax exemption—currently set at $13,610,000 for 2024.

However, non-residents with U.S. assets face a much smaller exemption of just $60,000. This stark difference means that non-citizens may be subject to high estate taxes, potentially up to 40% on assets exceeding the $60,000 threshold.

Residency status is a critical element in determining estate tax obligations. The Internal Revenue Service (IRS) uses the concept of “domicile” to decide who qualifies for the higher exemption. A person is considered domiciled in the U.S. if they live there and intend to remain permanently. Non-citizens who do not meet these criteria are considered non-residents and are subject to the lower exemption.

For example, someone living in the U.S. on a non-resident visa might still be considered domiciled for estate tax purposes. This contrasts with income tax rules, which would still treat them as a non-resident.

There are several strategies that non-citizens can employ to minimize their U.S. estate tax obligations:

Gifting Assets During Lifetime: One effective way to reduce estate taxes is by gifting assets while the donor is still alive. The IRS allows an annual exclusion for gifts up to $17,000 per recipient without any tax implications. This strategy can help decrease the value of the estate subject to tax upon death.
Leveraging Estate Tax Treaties: The U.S. has estate tax treaties with several countries, providing more favorable exemptions for residents of those countries. These treaties can significantly reduce estate tax obligations for non-citizens, making it crucial to understand which countries have such agreements with the U.S.
Utilizing Life Insurance: Life insurance can be a powerful tool in estate planning for non-citizens. Life insurance payouts are generally exempt from U.S. estate taxes, making them an attractive option for providing liquidity to cover any potential estate taxes without selling off other assets.

Given the complexities of U.S. estate taxes for non-citizens, seeking advice from experienced estate planning professionals who understand U.S. tax law and international estate planning is crucial. This includes not only tax attorneys but also financial advisors who are familiar with cross-border tax issues. A well-crafted estate plan can ensure that your assets are protected, and your family’s financial future is secure.

There are unique challenges to estate planning for non-citizens with U.S. assets. If you’re a non-citizen with U.S. assets, the tax implications can be significant. However, with the right planning, they don’t have to be. If you would like to learn more about planning for non-citizens with US assets, please visit our previous posts.

Reference: Guardian Life (Aug. 28, 2024) “US estate tax strategies for noncitizens and nonresidents with US assets”

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Safeguarding Wealth is an Essential Strategy for Senior Women

September 30, 2024

Women are living longer and facing unique financial challenges. With life expectancy for women being higher than men, senior women need their retirement savings to stretch further. According to JP Morgan, they often find themselves with less saved due to career breaks for caregiving and the persistent gender pay gap. Safeguarding wealth is an essential strategy for senior women to ensure financial security in their later years.

Retirement planning for women should consider their longer life expectancy and potential career interruptions. A well-crafted financial plan, designed with the help of knowledgeable advisors, can help address these concerns.

Women should actively participate in creating a plan that aligns with their lifestyle needs and future goals, factoring in anticipated and unplanned career breaks. It is also essential to regularly assess savings and investments to ensure that they are on track for a comfortable retirement.

Many women find themselves in the role of caregiver for aging parents. This responsibility often comes with both emotional and financial burdens. Women are more likely than men to leave their jobs to take care of aging parents, impacting their own retirement savings.

Beyond financial concerns, women should also consider the time and energy required for caregiving. Planning with family discussions about responsibilities can help ensure that these roles are agreed upon and manageable.

The American College of Trust and Estate Counsel Foundation highlighted the importance of women’s estate planning with the story of Huguette Clark, a wealthy woman who became isolated in her later years. Despite her wealth, Clark spent the last 20 years of her life alone in a hospital room, away from her multiple luxurious homes. She was fearful that everyone was after her money and chose to remain secluded.

Clark’s relatives challenged her will, claiming she was not of a sound mind when it was created. The case was settled. However, it illustrates how vital it is for senior women to protect their wealth and ensure that their wishes are respected.

Women should actively engage in estate planning to protect their wealth and ensure their financial security. This includes creating a will, setting up trusts and naming trusted individuals to manage their estate in case of incapacity. Understanding and participating in these decisions are crucial for senior women to prevent potential disputes and ensure that their assets are distributed according to their wishes.

Estate administration is another critical aspect of wealth planning for women. When a loved one passes, the burden of administering their estate often falls on women. This role includes locating assets, paying off debts and distributing inheritances, which can be a complex and time-consuming process. By planning ahead and discussing estate administration with family members, women can ensure that they are prepared to take on this role or appoint someone else who is better suited.

Safeguarding wealth is an essential strategy for senior women. If you are looking to secure their financial future, assembling a team of trusted advisors is a crucial first step. This team should include a financial advisor, an estate planning attorney and a tax professional who understand women’s unique challenges.

These advisors can help develop a comprehensive plan that aligns with a woman’s financial goals, family responsibilities and long-term needs. Regular communication with this team ensures that the plan adapts to changing circumstances, providing peace of mind and financial security. If you would like to learn more about planning for women, please visit our previous posts.

References: J.P. Morgan (Mar. 20, 2024) “Wealth Planning Is a Women’s Issue” and The American College of Trust and Estate Counsel (ACTEC) Foundation (Mar. 20, 2024) “Balancing Independence and Vulnerability of Older Adults: What if Granny Wants to Gamble?”

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Women should Plan for a Second Retirement

September 23, 2024

Many spouses design their retirement finances and estate plans with their spouses. However, planning for the second phase of retirement and estate plans also needs to be done. Women should plan for a second retirement. When the first spouse dies, the surviving spouse would be well served by a plan for the “second retirement,” as explored in a recent article from Nasdaq, “I’m a Financial Expert: 7 Ways Ever Woman Can Prepare for a ‘Second Retirement.’”

In 2021, data from the U.S. Census Bureau shows that 30% of all older women were widows. There were also more than three times as many widows as widowers.

How do you plan? It depends on your age and financial situation. For instance, becoming a widow in your 60s is very different from becoming widowed in your 80s. If your network of friends and family was through your spouse, this may also change dramatically after their death.

The most important question is what the household income will be upon losing the first spouse. This must be considered if the decedent had a pension, annuity, or other income source that stopped upon their death. A surviving spouse can’t claim a deceased spouse’s Social Security benefits in addition to their own. You can only receive one of two benefits—either your retirement or survivor benefit.

Some pensions end upon the account owner’s death, while some allow for survivor benefits. These are usually a percentage of the original amount, or they may offer a lump sum payment.

Living costs will change when the first spouse dies. The surviving spouse may be able to move to a smaller home or sell a second car. However, certain costs will go away. Meanwhile, other costs may occur, like one-time taxes on inherited IRAs and taxes on the sale of property and vehicles. Losing the spouse might mean some services, like home maintenance, will need to be paid for.

The death of a spouse will incur certain legal and administrative costs. If there was no will, probate is expensive and will be necessary. An estate planning attorney may be needed to help settle an estate if there was no will, while costs will be less if a will and trusts were created before the spouse died.

Major changes in circumstances like the death of a spouse can throw even the highest functioning people into a difficult emotional state. Women should plan for a second retirement that will help make the transition into their new life easier, or at least as easy as possible.

Speak frankly with an estate planning attorney about revising your estate planning documents and preparing for the second retirement. There will be more than enough to deal with at the time; it will be better if planning can be done in advance. If you would like to learn more about retirement planning for women, please visit our previous posts.

Reference: Nasdaq (August 17, 2024) “I’m a Financial Expert: 7 Ways Ever Woman Can Prepare for a ‘Second Retirement’”

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Preparing Your Adult Children for Their Inheritance

September 18, 2024

Talking about inheritance with your children is one of the most important conversations you can have. However, it’s never easy. This is a conversation about what happens after you’re gone. Preparing your adult children for their inheritance can prevent many problems down the road.

Avoiding the topic of inheritance might seem like the path of least resistance. That is true at first. However, after you’re gone, your loved ones might suffer confusion, misunderstandings and family conflicts due to a lack of communication. Not discussing your plans could pose unanswered questions to your children or, worse, unexpected financial burdens.

According to Fidelity, open communication helps your children avoid surprises and prepares them emotionally and financially. Discussing your estate plans with your adult children can smooth the transition of wealth by sharing the values and intentions behind your decisions.

Starting the conversation about inheritance can be awkward. However, it doesn’t have to be. Begin by setting clear expectations. Let your children know why you’re discussing this and what you hope to achieve. Focusing on the importance of family unity and ensuring that everyone is on the same page is helpful.

You can start with simple topics, like how you manage your finances or the basics of your estate plan. As the conversation progresses, more details will be introduced, such as how assets will be distributed and the reasons behind these decisions.

Financial education plays a significant role in preparing your children for their inheritance. If your children lack basic money management skills, they may struggle to manage the wealth they inherit.

Start teaching them early by encouraging good financial habits. For example, you can help them set up a budget, open a savings account, or understand the importance of credit. As they age, consider discussing more complex topics, such as investing, taxes and the importance of maintaining a financial cushion.

Many parents worry about how their children will manage a large inheritance. If this concerns you, establishing a trust can effectively protect your assets, while still providing for your children’s needs.

Trusts can be tailored to fit your family’s unique situation. For example, you might set up a generation-skipping trust to benefit your grandchildren or a spendthrift trust to prevent a beneficiary from mismanaging their inheritance. Trusts can also help minimize taxes and protect your assets from creditors.

Even with the best preparation, the wealth transition can still be challenging. One of the best ways to ensure a smooth process is by developing a comprehensive estate plan built on clear communication and understanding. Ensure that your children know where essential documents are stored and who to contact when the time comes. Consider creating a family mission statement to outline your values and provide guiding principles for your children.

Preparing your adult children for their inheritance is about more than just transferring money. It’s about passing on your values and ensuring that they’re ready to handle the responsibilities that come with it. If you would like to learn more about managing an inheritance, please visit our previous posts.

Reference: Fidelity (Jul. 26, 2024) “Preparing your children for their inheritance”

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Pitfalls of DIY Real Estate Deeds

September 16, 2024

When transferring property, many people think, “How hard can it be?” This is where DIY deeds, especially quitclaim deeds, come into play. They seem like a quick and easy solution to pass on property to loved ones. However, this shortcut can lead to major headaches down the road. Kiplinger underlines the pitfalls of DIY real estate deeds and how to avoid errors.

A quitclaim deed is a simple document that transfers whatever interest the grantor (the person transferring the property) has in a property to the grantee (the person receiving the property). It’s often used between family members to avoid probate or as a quick way to add someone’s name to a property deed.

However, here’s the catch: While quitclaim deeds are easy to create and file, they don’t offer any guarantees. The deed only transfers the grantor’s interest—if any—and doesn’t ensure that the title is clear or that the grantor even owns the property outright.

Using a quitclaim deed without professional guidance can lead to several unforeseen problems. Here’s a closer look at some of the most common issues.

One of the biggest pitfalls of using a quitclaim deed is discovering too late that you don’t actually have a clear title to the property. For example, if a child inherits a home and uses a quitclaim deed to transfer the property into their name, they might believe everything is fine—until they try to sell the house.

At that point, a title company might uncover that the property transfer skipped the required probate procedures, rendering the title unmarketable. The sale stalls, leaving the new owner stuck in a legal mess.

Another major risk arises when you add someone else’s name to your property deed. Suppose a parent adds their child to the deed to avoid probate. If that child later faces financial issues, such as bankruptcy or a lawsuit, their creditors could claim a stake in the property. This means the parent might lose part of their home to settle the child’s debts because they took the DIY route.

Adding someone to a deed can also cause complications with insurance and taxes. For example, once another person is listed on the deed, the original homeowner must notify their insurance company. If they fail to do so, the property insurance might become invalid, leaving the property uninsured. Transferring with a quitclaim deed can also trigger gift tax requirements; while selling the home may result in hefty capital gains taxes you could have avoided with a trust.

Using a trust instead of a quitclaim deed offers significant advantages. A trust allows you to transfer property without losing control during your lifetime and provides a clear path for the property after your death. This approach can help avoid the probate process, protect your property from creditors and reduce potential tax liabilities for your heirs.

For example, if you transfer your home into a trust, the property’s value is adjusted (“stepped up”) to its fair market value at your death. This can reduce or eliminate capital gains taxes for your heirs when they eventually sell the property.

Avoid the pitfalls of DIY real estate deeds. Don’t let a simple mistake cost you or your loved ones dearly. If you would like to learn more about deeds and real property in your estate planning, please visit our previous posts.

Reference: Kiplinger (Mar. 20, 2024) “How Quitclaim Deeds Can Cause Estate Planning Catastrophes”

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The Estate of The Union Season 3|Episode 10

The Estate of The Union Season 3|Episode 9 is out now!

September 12, 2024

The Estate of The Union Season 3|Episode 9 is out now! There are few things we dislike more than going to the mall and shopping for new clothes. While we like to look good (most of the time), getting to the store is a hassle, parking is a bear and finding something that looks good and FITS, is a greater challenge than most of us want to put up with.

In this episode of The Estate of the Union, Andy Wiewel, Brad and Cindy’s second born son, shares how he can help make guys look great -and actually like the process! Andy is a Top Clothier with Tom James, which specializes in getting men to dress well in customized clothes that look good and feel good.

Not all bodies are created equally: Some of us are big, others less big. Some of us are tall, and others less so. Some of us like to show off and others just like feeling comfortable in our clothes. These are things that Andy focuses on exclusively.

He explains his passion for helping guys and those who love them – those who want to see the man in their lives “up their game” from t-shirts and shorts, to something that shows off their natural good looks and good taste. Brad and Andy have a very entertaining discussion on the topic of Dress For Success, and it is one you’ll enjoy – a lot!

In each episode of The Estate of The Union podcast, host and lawyer Brad Wiewel will give valuable insights into the confusing world of estate planning, making an often daunting subject easier to understand. It is Estate Planning Made Simple! The Estate of The Union Season 3|Episode 9 is out now! The episode can be found on Spotify, Apple podcasts, or anywhere you get your podcasts. If you would prefer to watch the video version, please visit our YouTube page. Please click on the links to listen to or watch the new installment of The Estate of The Union podcast. We hope you enjoy it.

Texas Trust Law focuses its practice exclusively in the area of wills, probate, estate planning, asset protection, and special needs planning. Brad Wiewel is Board Certified in Estate Planning and Probate Law by the Texas Board of Legal Specialization. We provide estate planning services, asset protection planning, business planning, and retirement exit strategies.

Sharing Family Values in Your Estate Plan

September 9, 2024

Estate planning isn’t just about managing finances and assets; it’s also a way to pass down family values that shaped your life. As you think about the legacy you want to leave behind, consider sharing those critical family values in your estate plan. Doing so ensures that your life’s lessons, beliefs, and traditions guide and inspire your family even after you’re gone.

Family stories are more than just memories; they are the building blocks of your family’s identity. Professor Elizabeth Keating from the University of Texas highlights the importance of uncovering these stories by asking thoughtful questions. According to Keating, by learning about your parents’ and grandparents’ experiences, you can see the world through their eyes and understand the values that guided them.

When planning your estate, these stories can play a crucial role. For instance, if you value hard work and education, you might want to include provisions in your estate plan that encourage these traits in your heirs. This could be through establishing a trust that supports education or guidelines that reward hard work and responsibility.

Setting up a trust is one effective way to embed your values in your estate plan. Trusts offer flexibility, allowing you to set specific conditions for how and when your assets are distributed. For example, if you want to encourage your children to pursue higher education, your trust could cover tuition and educational expenses. On the other hand, if you want to promote entrepreneurship, you could create provisions that support starting a business.

A well-drafted trust can include various instructions tailored to reflect your values. Here are a few examples:

Encouraging Education: The trust could stipulate that funds are released to pay for college or other educational pursuits.
Promoting Work Ethic: Distributions might be tied to the beneficiary’s employment status or income level.
Supporting Healthy Lifestyles: The trust could include incentives for maintaining good health or even require periodic drug tests.
Fostering Philanthropy: You could set aside a portion of the trust to be donated to charities that align with your values or establish a charitable foundation in your name.

According to an article written by Kiplinger, discussing your estate plan with your family is essential to ensure that everyone understands your wishes and the values you hope to pass on. This dialogue can also allow you to share the stories and lessons that have shaped your life. Dr. Keating emphasizes the power of asking the right questions to uncover these stories, which can strengthen the connection between generations.

By having these conversations, you clarify your intentions and give your family a deeper understanding of the values behind your estate planning decisions. This can help prevent misunderstandings and conflicts down the road.

For many, faith plays a significant role in their lives, and estate planning is an opportunity to ensure that these beliefs continue to guide future generations. Whether supporting religious institutions, funding mission trips, or simply promoting charitable giving, your estate plan can be tailored to reflect and perpetuate your faith.

Incorporating a statement of purpose within your trust can serve as a powerful reminder to your heirs about the importance of these values. This statement can outline your motivations and provide guidance on how you wish your legacy to be used, ensuring that your values continue to influence your family for generations.

Sharing your family values in your estate plan offers a unique opportunity to preserve and promote then for future generations. By incorporating thoughtful provisions and having open conversations with your loved ones, you can ensure that your legacy is about more than just money—it’s about the values that have guided your life.

If you would like to learn more about sharing personal life lessons and advice in your estate planning, please visit our previous posts.

References: The University of Texas (Nov. 10, 2022) “Faculty Publication: The Essential Questions: Interview Your Family to Uncover Stories and Bridge Generations by Elizabeth Keating” and Kiplinger (Jun. 27, 2023) “In Estate Planning, Your Values Can Play a Key Role | Kiplinger”

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Understanding Primary and Contingent Beneficiaries is essential for Estate Planning

September 3, 2024

Creating an estate plan is the most important way to ensure that your wishes will go into effect after you pass away. During estate planning, you’ll have to designate beneficiaries. Understanding the difference between primary and contingent beneficiaries is essential for estate planning. Knowing this distinction can make your estate plan more comprehensive and effective, giving you peace of mind that your loved ones will be okay when you’re gone.

A primary beneficiary is the person or entity you choose to receive your assets first when you pass away. This could be a spouse, a child, a friend, or even a charity. When you set up a will, trust, or other financial accounts, like life insurance or retirement, you’ll be asked to name one or more primary beneficiaries.

You might name your spouse as the primary beneficiary if you have a life insurance policy. If you pass away, your spouse will receive the payout directly.

Choosing a primary beneficiary ensures that your assets go to the person or organization you want them to benefit. It can also help avoid conflicts among family members and ensure a smooth transfer of assets. You minimize the chances of disputes and legal challenges by clearly designating who should receive your assets.

Life is unpredictable, and there might be situations where your primary beneficiary cannot receive your assets. They might predecease you, be unable to be located, or simply refuse the inheritance. This is where a contingent beneficiary comes into play.

A contingent beneficiary, or secondary beneficiary, is essentially a backup beneficiary. The contingent beneficiary is next in line if the primary beneficiary cannot receive the assets. For instance, if your spouse is the primary beneficiary and they pass away before you, your contingent beneficiary will receive the assets instead.

According to ElderLawAnswers, naming a contingent beneficiary is essential in estate planning. A contingent beneficiary is designated to receive your assets if your primary beneficiary cannot do so.

This additional layer of planning provides security and peace of mind, guaranteeing that your assets are passed on as you intended, regardless of any unexpected events involving your primary beneficiary. Your wishes will remain clear even in unforeseen circumstances, and your estate plan will carry them out.

Yes, you can designate multiple primary and contingent beneficiaries. This is particularly useful if you have a large estate or multiple heirs. For example, you might want to divide your estate equally among your children. In this case, you can name all your children as primary beneficiaries, each receiving a specified percentage of your assets.

When you have multiple primary beneficiaries, your assets are divided according to the percentages you specify. If one of the primary beneficiaries cannot receive their share, their portion can be reallocated to the remaining primary beneficiaries or passed on to the contingent beneficiaries.

You can similarly have multiple contingent beneficiaries. For example, you might name your spouse as the primary beneficiary and your two children as contingent beneficiaries. If your spouse cannot receive the assets, your children would then receive the assets consistent with your instructions.

While beneficiaries are individuals you choose to receive your assets, heirs-at-law are entitled to inherit from you under state law if you don’t have a will. Without an estate plan, state intestacy laws will distribute your assets. This usually goes to your closest relatives, such as your spouse and children. Designating primary and contingent beneficiaries allows you to control who receives your assets rather than leaving it to state law.

Life circumstances change, and so should your estate plan. Major life events such as marriage, divorce, the birth of a child, or the death of a beneficiary may require updates to your beneficiaries. Regularly reviewing and updating your estate plan ensures that it remains aligned with your current wishes and life situation.

Understanding the roles of primary and contingent beneficiaries is essential for robust estate planning. It ensures that your assets are distributed according to your wishes, even in unexpected circumstances.

An experienced estate planning attorney can help you designate beneficiaries, create a comprehensive estate plan and provide peace of mind for you and your loved ones. If you would like to learn more about beneficiaries and their role in estate planning, please visit our previous posts.

Reference: ElderLawAnswers (May 20, 2024) “What Is a Contingent Beneficiary?”

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Ensure your Child’s Future is Protected with Estate Planning

August 26, 2024

Becoming a parent is an exciting journey filled with dreams and plans for the future. Amidst the joy and anticipation, you also need to consider your child’s future security. While no one wants to think of it, the worst could happen to you, and you could become unable to care for your child. Without an estate plan, your assets could go through a lengthy probate process, and the court would decide on guardianship for your children. Ensure your child’s future is protected with estate planning.

Estate planning involves organizing your financial affairs to ensure that your assets are managed and distributed according to your wishes after you pass away. It includes creating a will, assigning power of attorney and considering trusts. According to Experian, planning ahead can avoid potential legal complications and ensure that your loved ones are taken care of. Estate planning can also help minimize taxes and protect your assets from creditors.

Without a will, state laws determine the distribution of your assets and the guardianship of your children. This could mean that your child ends up with a relative you haven’t spoken to in years or foster care. An estate plan allows you to choose guardians and ensure that your child’s future is secure.

A will is the foundation of your estate plan. It should:

Name a guardian for your children.
Name an executor to manage your estate.
Specify who inherits your assets.

Power of attorney allows someone to make financial and health care decisions on your behalf, if you become incapacitated. This includes:

Financial Power of Attorney: Give someone the power to manage your finances and property.
Health Care Power of Attorney: Empower someone you trust to make medical decisions for you.

The best time to start estate planning is now. Waiting until your baby arrives can lead to delays and potential financial hardships. Building an emergency fund, contributing to a health savings account and setting up automatic savings transfers are great first steps. Proactively managing your finances can help reduce stress and ensure a smoother transition into parenthood. Starting early also allows you to make informed decisions and adjust your plan.

When Joyce Marter, a financial therapist and author, was expecting her first daughter, she found herself living paycheck to paycheck with substantial student loans. In an article by the NY Post, she reflects and explains how she realized the immense value of having a solid financial plan before transitioning into parenthood. Marter recalls a conversation with her pregnant supervisor, who advised her that no one is ever truly ready for a baby: “None of us are really ever truly ready — you just take the plunge and figure it out as you go.”

Years later, as Marter prepared for her own child, she understood the importance of proactive financial planning. She began by building an emergency fund, contributing to a health savings account and avoiding unnecessary baby registry items. These steps provided a financial safety net and helped reduce stress during her pregnancy.

Don’t wait until it’s too late. Ensure that your child’s future is protected and your wishes are honored with proper estate planning. If you would like to learn more about planning for minor children, please visit our previous posts.

References: NY Post (Oct. 18, 2023) “Savvy expecting parents need to start financial planning now” and Experian (Oct. 13, 2020) “How to Plan Your Estate as a New Parent – Experian”

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Disability Insurance is a vital Component of Estate Planning

August 22, 2024

Disability insurance is a vital component of comprehensive estate planning. It ensures that you and your family can maintain financial stability in the event of a disabling condition. According to the American Medical Association (AMA), understanding the essential aspects of disability insurance is vital to choosing the best policy for your needs.

Disability insurance provides income replacement if you’re unable to work due to illness or injury. It is a safety net that ensures that you can continue to meet financial obligations, even when you are not earning a regular salary.

Imagine being the primary breadwinner for your family. One day, you suffer a severe injury that prevents you from working. Without disability insurance, the loss of income could lead to significant financial hardship. Disability insurance provides stability by covering these losses while you get back on your feet.

Selecting the right disability insurance policy requires understanding various factors and terms. For one, you need to understand the kind of liabilities you have to choose from to find the most suitable coverage. Combine this with Riders that match your needs to get customized, affordable disability coverage.

Own-Occupation: This type provides benefits if you cannot perform the duties of your specific occupation. It’s ideal for professionals, like doctors or lawyers, who have specialized skills.
Any Occupation: This type only provides benefits if you cannot work in any occupation suited to your experience and education. It’s less expensive but offers broader coverage.
Modified Own-Occupation: You receive benefits if you cannot perform your job and are not working in another job. This is a middle-ground option that balances cost and coverage.

What Riders are Available for Disability Insurance?

Residual Disability Rider: Provides partial benefits if you can work part-time but not full-time.
Cost of Living Adjustment (COLA) Rider: Adjusts benefits according to inflation, maintaining your purchasing power.
Future Increase Option Rider: You can increase coverage as your income grows without additional medical exams.

The cost of disability insurance varies based on several factors:

Age and Gender: Younger individuals and women typically pay higher premiums.
Occupation: High-risk jobs attract higher premiums.
Health: Pre-existing conditions can increase the cost.
Coverage Amount and Duration: Higher benefits and longer durations cost more.
Policy Riders: Additional features, like cost-of-living adjustments, can raise premiums.

Disability insurance is a vital component of comprehensive estate planning. Protecting your future requires careful planning. Once you’re injured, it’s too late to begin planning. That’s why you should contact an experienced attorney and start planning today. If you would like to learn more about disability insurance, please visit our previous posts.

Reference: American Medical Association (AMA) (May 21, 2024) “Evaluating a disability policy | American Medical Association”

Category: Family

Unique Challenges to Estate Planning for Non-Citizens with U.S. Assets

Safeguarding Wealth is an Essential Strategy for Senior Women

Women should Plan for a Second Retirement

Preparing Your Adult Children for Their Inheritance

Pitfalls of DIY Real Estate Deeds

The Estate of The Union Season 3|Episode 9 is out now!

Sharing Family Values in Your Estate Plan

Understanding Primary and Contingent Beneficiaries is essential for Estate Planning

Ensure your Child’s Future is Protected with Estate Planning

Disability Insurance is a vital Component of Estate Planning

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