Modern Estate Plans

[Brian Bradley]

Do you have your Estate Plan / Trust in place? If not, then you are not protected from wealth destruction and the Big 4.

Most come on Bigger Pockets to learn to invest and build connections. Then they realize the need to protect their assets and the importance of creating an Asset Protection system. However, most put off the most important aspect of Asset Protection / Wealth Preservation. Their Estate Plan. Asset Protection is not just about preventing liabilities. A true asset protection plan involves protecting you from the Big 4 wealth destroyers:

1. Devastating healthcare expenses;

2. Remarriages after the death of the first spouse;

3. Your children’s own divorce or death before their spouse; and

4. Judgments from lawsuits.

Most asset protection attorneys stop at, and only focus on, judgment protection, and most estate plans do nothing to prevent the other three. They only focus on death taxes and probate avoidance. Neither of which are relevant in todays time. Death taxes and probate are outdated concerns and are not what destroy modern day wealth.

Current estate planning is NOT serving modern society and families. An out of control litigious society, and the things that really eat up modern family wealth have nothing to do with what consumers would expect. Your standard estate plan is still 100 years behind the times, and families have devastating costs due to poor traditional and outdated estate planning that have nothing to do with asset protection.

Estate Planning is Dead! It ignores the things that are destroying families, destroying financial independence, and destroying wealth in modern society. They do nothing to protect family assets from the modern enemies of your legacy.

The good news is we are living a lot longer, the bad news is we are not prepared for it, and the financial and legal services industries are very traditional and slow to evolve.

The federal death tax increased in 2000 from $675k per couple to $5,45M per couple. So the modern estate tax impacts less than two-tenths of 1 percent (0.02%) of American’s, unless you live in a state like Oregon. One simple planning devise most do in their estate plans is to combine the estate tax exemption for each spouse in a trust (called an A/B trust). This preserves the estate tax credit and passes it along to the surviving spouse so when the surviving spouse dies, the children could use both parents estate tax credits in the same estate. But, if you live in a state like lets say Oregon that still has death taxes and that still requires the payment of the surviving B estate side, the A/B Trust does not offer much help. And if you are not one of the (0.02%ers), your not affected, so the AB Trust is outdated anyways.

What you really need is a modern up to date estate plan that focuses on current modern wealth destroyers. You must have Medicaid Triggers! Planning for unconscious states, not just transferring property at death. We will spend more time in unconscious states and in long-term care. The ability to move assets around while one parent or spouse is unconscious and to pay for long term care and to qualify for Medicaid is necessary. Long Term Care Insurance. And if you have kids, not just guardians, but temporary guardians like your babysitter or neighbor who can take care of your children while the long term guardian arrives, That way you avoid child services and the long court system. Especially if your named guardians do not live in the state. 

When you look for a law firm or lawyer to draft your estate plan, do not just price shop. You get what you pay for.