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#2446 | |
In BB I trust
Join Date: May 2003
Location: Boston, Mass.
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Quote:
Agreed all around. The death benefit is the cash value plus the guaranteed death benefit. You can withdraw the cash value at any time, but obviously that reduces the amount of the death benefit you get. You could zero out the cash value, leaving only the guaranteed death benefit. And I also agree that the cash value is what is producing the income that could potentially cover the premium. In my case, the annual dividend/interest (however it is categorized) is approximately equal to the annual premium, which means that if I apply the income to the premium, (1) I don't have to pay the premium out of pocket, and (2) the cash value is not reducing (just not growing) and (3) therefore, the death benefit is not reducing (just not growing). Of course, the annual income is not -- to my knowledge -- fixed, so in a down economy that amount could be less, and insufficient to cover the premium, meaning that I would either need to come out of pocket to cover the premium, or let the cash value reduce. Hopefully this all makes sense. Hopefully I have all this RIGHT!! |
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Posts: 43,125
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#2447 | |
In BB I trust
Join Date: May 2003
Location: Boston, Mass.
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Quote:
Nobody needs to do a trust. Advantages to a trust depending on circumstances: 1. no probate, which means no public filings, revealing the amount of the assets transferred. 2. smoother/quicker transfer of assets. Nothing "hung up" in probate. 3. potential tax advantages (highly dependent on your level of wealth and type of trust). See GRATs for significant evidence of this. 4. potential to put your assets beyond the reach of the state government in the event of end of life medical expenses under Medicare/Medicaid. More on this below. So in Massachusetts, Medicare/Medicaid (I can never remember which) will cover your nursing home costs (think $10,000/month or whatever) if you are basically impoverished (the old rule was $2,000 or less in assets). If you have more than that, and need to go into a nursing home, then you will be required to spend down your assets until you reach that threshold, at which point the state starts to pay. So it is common for older people to place the majority of their wealth in a trust as this kind of expense will break all but the most wealthy of people, effectively disinheriting their kids. If the property is in a trust, then it is not the trust res (corpus, actual assets, as opposed to income) is beyond the reach of the state and cannot be applied to these nursing home costs. In Massachusetts, however, there is a five year look-back period, allowing the state to claw back assets placed into trust less than five years prior to whatever the trigger date is (institutionalization, or the date Medicaid started to cover the cost, or whatever). All this gets tricky/sophisticated, but if you care about preserving your assets in an end-of-life situation where a nursing home can easily eat five figures per month of your life savings, then you should have this in mind. 30 seconds of research suggests this might be a worthwhile website for you to review: https://www.elderlawcolorado.com/Con...ervation.shtml See also: https://www.seniorplanning.org/long-...lity/colorado/ Oh, and good advice: tell your wife to forget about useless life insurance and think about long term care insurance and/or disability insurance The path to poverty for the upper middle class/lower upper class is disability/invalidity/serious health issues. It stunts or eliminates income while driving costs through the roof for potentially protracted periods of time. |
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Posts: 43,125
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#2448 | |
Mod Team
Join Date: Sep 2011
Location: Valley of the hot as ****
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Quote:
1. It avoids probate which can take years? Is years really true? -It also avoids probate fees which can be 5% of assets! 2. It limits who has access, can claim access and how much of your assets they can acquire at one time if needed. 3. Would delineate a set amount to be given to children, if both parents die, so your child doesn't blow through their entire inheritance. |
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Posts: 46,000
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#2449 |
MVP
Join Date: Dec 2008
Location: Joplin, MO
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Probate takes years if there are disputes among the people making claims. Other wise it takes months, usually more than just a few.
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Posts: 7,251
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#2450 | |
I'll be back.
Join Date: Nov 2002
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Here comes the IQ surge.
US, China reach 90-day ceasefire on tariffs in trade dispute Quote:
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Posts: 284,065
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#2451 |
Roy E.
Join Date: Sep 2005
Location: Olathe, KS
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Looks like tomorrow is going to be a good day.
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Posts: 22,974
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#2452 | |
Mod Team
Join Date: Sep 2011
Location: Valley of the hot as ****
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Quote:
And thanks Trump! |
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Posts: 46,000
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#2453 |
NFL's #1 Ermines Fan
Join Date: Jul 2001
Location: My house
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I'm ready for a good day.
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Posts: 142,246
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#2454 |
I'll be back.
Join Date: Nov 2002
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I bet I sell IQ in a week or two
![]() I'm not giving it a second chance if it gets within a few thousand of where it was |
Posts: 284,065
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#2455 | |
In BB I trust
Join Date: May 2003
Location: Boston, Mass.
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Quote:
I mean, if you're an ordinary couple, then: 1. your house is owned jointly, so it passes automatically upon death without going through probate. 2. your bank accounts and investment accounts are held jointly, so that too goes through probate. 3. your 401(k) etc. often have a named beneficiary, so it will pass outside of probate to your named beneficiary. So yeah, usually not THAT big of a deal to go through probate, but some of the above may be part of the taxable estate which could have an impact, depnding on the state, and there may be other assets that do need to pass through probate, which can be a pain. BUT -- KEY CAUTION -- I AM NOT AN WILLS/TRUSTS/ESTATES LAWYER AND THIS IS A F'ING WEBSITE. The legal advice I give is worth about what you're paying for it -- nothing. Seek professional advice from a lawyer with expertise in this issues IN YOUR STATE. |
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Posts: 43,125
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#2456 |
Mod Team
Join Date: Sep 2011
Location: Valley of the hot as ****
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Posts: 46,000
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#2457 |
I'll be back.
Join Date: Nov 2002
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Posts: 284,065
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#2458 | |
Mod Team
Join Date: Sep 2011
Location: Valley of the hot as ****
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Quote:
My biggest reason for having a Trust would be to delineate monetary assets such as investments, so say my 12 year old son wasn't placed with a lump sum of cash and instead you could delineate money to him over decades if needed. What happens in that scenario where both parents die and let's say have a sum of $250k in investment accounts? They only have one child, who let's say is 10 years old. If they have no trust does that minor really become the sole beneficiary of that lump sum? |
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Posts: 46,000
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#2459 |
I'll be back.
Join Date: Nov 2002
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GO IQ GO
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Posts: 284,065
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#2460 | |
In BB I trust
Join Date: May 2003
Location: Boston, Mass.
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Quote:
Yes, but what will happen in the real world is a guardian would be appointed because nobody is going ot hand a kid $250K in cash. He doesn't have legal capacity to even enter into a contract for God's sake. So hopefully some family member who isn't in it to steal the money for himself/herself steps up, otherwise a bunch of family members potentially fight over the appointment, etc. But if you set up your estate plan that can be in what is called a pourover trust, where your assets (other than specific bequests and the like) are poured over into a trust that exists on paper but has nothing and does nothing until/unless you die, at which point it goes into the trust. The trustee is whoever you appointed etc. etc. Different trusts for different purposes. But yes, if you have underage kids, at least a pourover trust is a damn good idea. |
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Posts: 43,125
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