There has never been a better time to target the estate planning market
- First, the repeal of the federal estate tax for 2010 has eliminated estate tax entirely for people dying in 2010, and-if Congress doesn't act this year-we will experience the largest single estate tax increase in history when the maximum estate tax rate returns to 55% in 2011. When news like this is making headlines, it opens the door for you to get appointments with clients who are concerned about their own estates and what this news means for them.
- Second, the recent steady decrease in stock values and other assets has made this a good time to gift and transfer assets, saving on current capital gains and eventual estate taxes. You can turn this negative environment into a positive situation for many prospects.
- Third, we can't ignore that Baby Boomer retirement has begun. As our largest generation enters retirement and begins thinking about estate planning and wealth transfer, the opportunities for estate planning business is sure to grow.
- Finally, even as front-page news and current events may prompt many families to begin thinking about their estate plans, many of them don't know where to start and need the guidance of a professional. Some people think estate planning is only for the wealthy, while others don't want to ponder the question, "What would happen if I died today?" According to a 2010 survey from Lawyers.com, only 35% of Americans have Wills, 29% have power of attorney for finances or healthcare, and 18% have a trust. That leaves a large segment of Americans who need help with the basics-giving you an opportunity for success in this market.
Start by mastering the Basics:
At its core, estate planning issues are simple: they are in response to three taxes, levied by both the Internal Revenue Service (IRS) and various states.
1. Estate taxes (or "Inheritance Taxes") that apply to assets passing at death
2. Gift taxes on assets transferred during life
3. Generation-skipping transfer taxes to prevent multi-generational transfer of
assets free from estate tax
In addition to minimizing taxes, estate planning is about making sure a person's assets are distributed as they wish upon death and that there is a plan for their finances and healthcare in case they were to become incapacitated. The basic elements of an estate plan are:
1. A Will - including the appointment of an Executor
2. Durable Power of Attorney
3. Durable Medical Power of Attorney
4. Health Care Proxy
5. Living Will
6. Basic Life Insurance - to provide for heirs and pay estate taxes.
You owe it to your clients
No one expects the federal estate tax repeal to last. After all, the government needs the income. In fact, many experts predict that Congress could decide to keep the 2009 rates and make them retroactive to January 1, 2010. However, with the current congressional gridlock, no one wants to take responsibility for raising taxes. There is a growing chance that Congress will simply allow the old-and much higher-rates to be reinstated on January 1, 2011 as the current law dictates. That takes them off the hook - and puts your clients on it, as the estate exemption will return to just $1,000,000 (including life insurance proceeds). This development would draw untold numbers of people into the estate tax realm for the first time. And remember, state estate taxes have not been repealed for 2010 and still apply.
If a person dies without a Will and other basic estate planning documents, they run the risk of their wishes and plans for their assets, property and dependents not being carried out as they intended. Without a Will, the estate may be left to a probate court to divide assets in accordance with state law, not necessarily as an individual or family would wish. This process can be very lengthy, expensive and public.
Now is the time to build an estate planning team and contact your clients and prospects.
Call Mark or Dave to get your Estate Planning Legacy Kit – 800-985-5549.