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Dianne Williams, MBA

Certified Retirement Counselor®

Since 1983 in the financial services and investment industry

 

Retirement Pathways, Inc.

4965 U.S. Highway 42, Suite 1000

Louisville, KY 40222

 

Phone:  502-797-1258 

 

Email: dianne@retirementpathways.com

Website: www.retirementpathways.com

May/June 2019

When You Need More Than a Will

While you can create a will yourself through an online legal service, consulting with your legal, tax and financial professionals may help you uncover financial challenges that a will alone cannot address. A trust may help you meet these challenges. Whether you have a modest estate you wish to shield from the public glare of probate or you want to reduce estate and inheritance taxes on a large estate, there is a trust to meet almost any estate planning challenge.


Two Types of Trusts
While there are many trusts, they all fall into two categories: revocable and irrevocable. They are what their names imply: You can amend and terminate a revocable trust, two things that are extremely difficult to do with an irrevocable trust. A revocable trust is designed for control and to keep financial affairs out of probate, not to reduce estate taxes.


Life Insurance Trust
One common type of irrevocable trust is a life insurance trust. While life insurance death benefits are usually income tax-free, they are subject to estate taxes. The threshold at which federal estate income taxes begin is more than most estates’ value, but state inheritance taxes could kick in at much lower levels in some locations.


A life insurance trust, not the estate, is the owner and beneficiary of the life insurance, and distributes its death benefit to beneficiaries named in the trust tax-free after the insured person dies.


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* Securities offered through American Equity Investment Corporation. Member FINRA/SIPC. 4222 Grant Line Road, New Albany, IN 47150. Investment advisory services offered through American Capital Management, an SEC Registered Investment Advisor. Retirement Pathways, Inc. is independent of American Equity Investment Corporations and American Capital Management.

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