Four Ways To Protect Your Estate


Estate planning is a critical step when working towards a sound, stable financial life for yourself and your family. From putting wills in place to designating beneficiaries and beyond, your estate requires thoughtful strategies. As you look to your own needs and goals, here are some financial tips to keep in mind:

1. Prepare to live a long life.

Outliving your resources can be a real threat to your family’s financial standing. Today, 1/4 of all 65 year olds will live to be in their 90's, and 10% will live beyond 95 years old. By planning for longevity, you can create financial strategies that help ensure you pass on your legacy with care.

2. Consider an Irrevocable Life Insurance Trust (ILIT).

An ILIT is a trust that owns a life insurance policy and helps people minimize their estate taxes. You designate your estate—rather than a person—as the policy’s beneficiary, making it an estate asset.

Once you set up an ILIT, you can never touch it, meaning you can’t make changes or close it out. When you or your spouse dies, your death benefits pay directly into the ILIT. From there, your estate beneficiaries (children, grandchildren, etc.) receive regular tax-free payouts from the ILIT instead of a taxable lump-sum (which could happen without an ILIT in place).

3. Try to avoid probate.

Probate is a legal process that can be expensive and cumbersome. People go through probate after someone dies and the court must determine a will to be valid. It also references the general administration of someone’s estate.

One way that you can possibly avoid probate is to set up Transfer on Death (TOD) on your financial accounts, such as bank and CD accounts. By doing so, you assign who specifically receives which assets and how much they get. And you may be able to avoid the costly probate process.

4. Review and update important documents regularly.

As life moves along, the details of your financial life will change, too. Reviewing your important documents and ensuring the details reflect where you are in life can help you protect your estate.

For example, did you recently marry? Have a child? Lose a spouse? These factors can affect the beneficiaries of your account, among other details, and create a real headache for family members trying to settle estate details. So, do yourself and your family a favor by making sure your financial accounts and will remain accurate as your life changes.

Your unique financial life and estate goals will drive the strategies that best work for you. To explore your own estate plan or visit how to create one, contact us today at (253) 327-1177. We’re happy to help you make the most of your financial opportunities.

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All written content on this site is for information purposes only. Opinions expressed herein are solely those of Penny Lane Financial and our editorial staff. Material presented is believed to be from reliable sources; however, we make no representations as to its accuracy or completeness. All information and ideas should be discussed in detail with your individual financial professional prior to implementation. Insurance products and services are offered through Penny Lane Financial LLC.