Life Insurance & Estate Planning

Protecting Your Family and What You Leave Behind

Estate planning and life insurance work together — but they do different jobs.

• A will can say who should receive your property and who should handle your estate.
• A living trust may help certain assets pass to your beneficiaries without probate when properly established and funded.
• Life insurance can provide money for the people you leave behind.
• Long-term care planning addresses a different problem: what happens financially if you live a long time but need help caring for yourself.
• Your will, trust, beneficiary designations and insurance coverage should be reviewed when your family, finances or wishes change.

Start Here

• California Sample Will & Advance Health Care Directive
• Life Insurance — Quotes, Coverage & How Much Do You Need?
• Living Trusts
• California Probate
• Long-Term Care, Nursing & Home Health Care

Important: I am an insurance broker, not an attorney or tax accountant. I do not prepare wills or living trusts. These pages are educational resources to help you understand the issues and ask better questions of your attorney, accountant and insurance professional.

Popular California Estate Planning Resources

Looking for a particular estate-planning question? Start with the topic that best fits what you need.

• Sample California Statutory Will & Advance Health Care Directive
  • See a California statutory will and learn what happens if you die without a will.
  • Review questions about executors, guardians, beneficiaries and advance health care directives.
• Living Trust — Bank Accounts & Avoiding Probate
  • Learn the basic purpose of a revocable living trust.
  • Review how trusts relate to property, bank accounts and probate.
• California Probate
  • What happens when an estate needs to go through probate?
  • Learn about the court process and alternatives that may be available in some situations.
• Executor & Successor Trustee — What Are the Duties?
  • What does the person handling an estate actually have to do?
  • Review assets, debts, taxes, notices and distribution of property.
• Will Contests — Disinheriting or Excluding Someone
  • What happens when someone challenges a will?
  • When should you get specific advice from an estate-planning attorney?
• California Courts — Wills, Estates & Advance Care Planning
• California Courts — Probate Self-Help

Special Family & Tax Planning Questions

Some estate-planning situations need extra care.

• Special Needs Trust
  • Planning for a child or other beneficiary with a disability may require special trust provisions.
  • Trust language and distributions can affect needs-based government benefits.
  • Get qualified legal advice before setting up or funding a special-needs trust.
  • Official resource: Social Security — SSI Spotlight on Trusts
• Estate & Gift Taxes — Including Life Insurance Proceeds
  • Review the difference between estate tax, gift tax and income tax.
  • Estate and gift-tax rules and exemption amounts can change, so always verify current rules.
  • Official resource: IRS — Estate & Gift Taxes
• Gift Income — Does a Gift Count for Covered California MAGI?
  • Receiving a gift and owing gift tax are two different questions.
  • The tax and Covered California MAGI treatment may also be different.
• Life Insurance Proceeds & Income Taxes
  • Life insurance death benefits received by a beneficiary are generally not included in federal gross income, although exceptions and taxation of interest can apply.
  • Official resource: IRS — Life Insurance & Disability Insurance Proceeds

A Will Distributes Property. Life Insurance Can Create Cash.

A will can say who gets what you already own.

Life insurance can help answer a different question:

Where will the money come from if you die?

Consider whether your survivors would need money for:

• Replacing your income.
• Mortgage or rent payments.
• Credit cards or other debts.
• Childcare.
• College or education expenses.
• Final medical or funeral expenses.
• Helping a surviving spouse remain financially independent.
• Providing for children or other dependents.
• Business obligations or business succession.

Life Insurance Resources

• Life Insurance — Start Here, Get Quotes & Review Your Needs
• Rated Life Insurance — Medical Conditions & Underwriting
  • Don’t automatically assume a medical condition means you cannot get life insurance.
• Final Expense — Almost Guaranteed Issue Coverage
  • An option to investigate when ordinary life insurance underwriting is difficult.
• Find a Lost Life Insurance Policy, Pension or Bank Account
  • Useful after someone dies — and a good reminder to make sure your own family knows where your policies and important papers are located.
• Life Settlements — Can You Sell an Unwanted Life Insurance Policy?
  • Before surrendering or abandoning an older policy, find out what alternatives may be available.

Independent Consumer Information

• California Department of Insurance — Life Insurance Guide
  • California’s consumer guide explains how to evaluate your need for life insurance, how much coverage to consider and the major types of policies.

Before You Finish Your Will, Ask:

• Would my family have enough monthly income if I died tomorrow?
• Could they stay in the home?
• Could debts be paid without selling assets?
• Do I know how much life insurance I actually have?
• Are my beneficiary designations current?
• Does my family know where my policy is?

Review Life Insurance Options & Get Quotes

Estate Planning Isn’t Only About What Happens When You Die

Another important question is:

What happens if you live — but need years of help?

Long-term care expenses can affect the money and property you hoped to leave to your family.

• Long-Term Care, Nursing & Home Health Care — Start Here
  • Learn the differences between private long-term care insurance, Medicare, Medi-Cal, home care and nursing-home care.
• Do I Need Long-Term Care Insurance?
  • Consider the potential cost of care, your assets, family support and whether you can qualify medically.
• California Medi-Cal Estate Recovery & Long-Term Care Planning
  • Medi-Cal estate recovery is often misunderstood.
  • Review the current California rules and get legal advice before transferring property or changing an estate plan.

Official California Resource

• California DHCS — Medi-Cal Estate Recovery
  • Check the current state rules directly with the California Department of Health Care Services.

Planning question: Are you only planning for what happens to your money after death — or also protecting against what could happen to your savings while you are alive?

Put the Pieces Together

Estate planning does not have to mean becoming an expert on probate and tax law.

Start by making sure the important pieces have been reviewed:

• Will: Who receives your property?
• Executor: Who will handle your affairs?
• Guardians: Who would care for minor children?
• Living Trust: Would one make sense for your property and family situation?
• Advance Health Care Directive: Who can make medical decisions if you cannot?
• Beneficiary Designations: Are your life insurance and retirement beneficiaries current?
• Life Insurance: Would your survivors actually have enough money?
• Special Needs Planning: Does a disabled beneficiary require special planning?
• Long-Term Care: What happens financially if you need care for years?
• Important Papers: Does someone you trust know where your policies, will, trust and financial records are located?

Who Should Help With What?

• Attorney: Wills, trusts, probate, property transfers and legal advice.
• CPA or tax professional: Individual estate, gift and income-tax advice.
• Steve Shorr Insurance: Life insurance and long-term care insurance questions, coverage reviews and proposals.

Need Life Insurance Help?

• Start With My Life Insurance Page
• Set a Zoom or Phone Meeting

Educational information only. Steve Shorr is an insurance broker and is not an attorney or tax accountant. Estate, tax and trust rules can change and individual circumstances vary. Consult the appropriate licensed professional for legal or tax advice.

Why Plan your Estate?

The purpose of estate planning is to help a person build a large estate during life and to pass on as much of it as possible to the loved ones upon death.  While you might not have the $$$ Michael Jackson does, the problems can be very similar. ^{*  2.7.2014 LA Times} *

The main considerations in estate planning are:

• Avoiding probate

• Reviewing wills

• Considering a revocable living trust

• Reducing estate and inheritance taxes

• Quickly distributing the estate to your heirs. ^{(lawyer at large.com )}

 Consumer Links

• CA State Bar – FAQ’s
• Free Advise.com ESTATE PLANNING
  • Asset Protection
  • Estates Legalese
  • Free Advise.com Elder Law, ,  , ,
  • Wills
• Special Needs Trust disabled child
• California Courts – Self Help Site
• CA Court Property Declaration form for spouses to list the assets and how they think the assets should be divided
• J Law General Rules for Taxation of Estates and Trusts
• Questionnaire for Estate Planning