estate planning income
Estate Planning Part 16 – the 3 Phases of Estate Planning
Estate planning is the process of accumulating and disposing wealth before death of an individual or estate owner. The most important goal of estate planning is to make sure that the greatest amount of the estate passes to the estate owner’s intended beneficiaries while paying the least amount of taxes. In this article, we will discuss 3 phases of estate planning.
I. Creation
Most people misunderstand that wealth creation is only for people already have financial stability or are married. In fact wealth creation is for anyone who is over the age of 18 and has a permanent job. If you work, no matter what income levels you are, you can start to save some money through financial planning. Some people who I know created their wealth by investing only $100 per month at first. Remember the rule that you have to pay yourself 10% from your income first then spend only for what you need and limit spending on what you want.
II. Preservation
After You have created your wealth through years of following your financial plan, you now have reached the age or time that you would like to preserve your wealth. Here are some things that you can do:
1. Buy universal life insurance
Universal life insurance policies give you the privilege to defer your income accumulated up to maximum amount allowed every year. If you die, the investment amount together with the life insurance will be paid to your designated beneficiaries tax-free. This is helpful to preserve your wealth.
2. Invest prudently
Through careful financial planning without any emotional buying or selling caused by fluctuation of stock market(such as stock crash, stock down turn), and if you monitor your plan annually, you should be able to build a sizable wealth for your estate.
3. Maximize your IRA or RRSP contribution
IRA and RRSP contribution allows you to defer you income tax until they are withdrawn. The more IRA and RRSP contribution up to maximum amount, the more taxes are deferred that give you more income to plan for your wealth accumulation.
III. Wealth transferring
By writing your will, your wealth will be distributed according to your wish to the beneficiaries.
It is the time to choose a knowledgeable and trustful person as your executor who will help to distribute your asset after you dies. You may want to form a testamentary trust if you have a disable beneficiary.
* By forming testamentary trust you can provide period of income for your disable beneficiaries. Since testamentary trust has it’s own tax status, it pays less tax if there is income retained every year.
* Use universal life insurance to pay for all deferred tax investment such as capital gain, so you can leave more wealth to your beneficiaries.
* Transfer some assets to join tenancy with the right of survivor, so your estate will not need to pay tax after you die.
The 3 phrases of state planning only provides you with a general idea of the subject, please consult with your financial planner for your specific needs.
I hope this information will help. If you need more information or insurance advice, please follow my article series of the above subject at my home page at:
http://medicaladvisorjournals.blogspot.com
http://lifeanddisabitityinsuranceunderwriter.blogspot.com/
About the Author
All rights reserved. Any reproducing of this article must have the author name and all the links intact.
“Let Take Care Your Health, Your Health Will Take Care You” Kyle J. Norton
I have been studying natural remedies for disease prevention for over 20 years and working as a financial consultant since 1990. Master degree in Mathematics, teaching and tutoring math at colleges and universities before joining insurance industries.
how difficult is law school, I’m wanting to be a tax/estate planning attorney?
i want to be an attorney that handles tax ad estat planning. how long do I have to go to school, what are major challenges, income, job outlook, work-life balance. I am 24 and have my degree in business adm…advice is needed
I just graduated from law school in May. I’m still looking for a job, but part of my problem is that my grades in law school weren’t terrific. On top of that, I went back to school when I was 29, now I’m 33, so I suspect my age works against me.
Law school is 3 years. Before you get in, you’ll have to take the LSAT (law school entrance exam). Even if you are only thinking about law school, you should take it now because the results take a while to come back. Most schools have an application deadline around March or April, but the sooner you get your applications in, the better chance you have of being admitted and/or getting a scholarship.
You can try to go part-time, but it is hard to get into a good school that way…most of the better schools don’t even have part-time programs. Reputation of your school, as well as grades, is critical. Don’t bother spending the time and money if you don’t have the time/patience to go full-tilt. Frankly, if you can only get into a bottom-tier school, I wouldn’t bother. You’ll be able to get a job as a lawyer, but you won’t make any more than 40K per year, and on top of that will probably have a lot of student loans. Same goes if you think you can only get mediocre grades. Of course, if you aren’t worried about money so much as job satisfaction, that changes the equation. I will likely not make too much more than I made before law school, when I was a biologist. The thing is, I hated working in a lab, so it’s a good trade for me.
Law school is hard. During school, I would plan on either not working at all, or working no more than 10 hours per week, especially during your first year. The first year is critical because it contains foundation courses, and you will need good grades to get your first internship, which is critical to your later success. You will work like an animal your first year. If your first year grades are horrible, I would consider dropping out. That sounds harsh, but they sort of determine the course of your career.
Job outlook depends upon your grades and the school you go to. Legal jobs can be pretty recession-proof, this will be particularly true for tax and estate planning. Since you have a degree in business admin, you might have an easier time, particularly if you have a bit of experience and/or went to a good school for your undergrad. Try looking up some of your local firms, particularly ones that have tax practices. Look at the bios of their associates, most firms list them on their websites. Check out their backgrounds, compare them to yours. If your credentials are about on par, then go to their recruiting page and see if you can guess what the average salaries are.
OK, so this was sort of a brain dump, but my best advice to you is, if you want to do it, absolutely go for it. Just go in with your eyes very wide open. Know what debt you will be in, and have a pretty decent idea of what the local job market is. Don’t rely on your prospective law school to tell you what your salary prospects are. They fudge the numbers to make their school look better. If you can, have a sit-down with a local attorney.
Good luck.
Estate Planning : Do You Have to File an Income Tax Return After Someone Dies?
Abolishing estate tax critical to restoring economic prosperity: Chagrin Solon Sun Letter to the Editor
In its editorial “Don’t kill the death tax” (Feb. 17), the Sun makes its position on pending House Bill 3 clear.