Estate Planning for Business Owners

estate planning personal residence trustestate planning strategiesestate planning strategyestate_plan_ for business owners

The irrevocable life insurance trust is not the only form of trust that’s useful with an estate plan. There are actually several different types of trusts that have important roles to play in the estate planning process.

One of the more popular trusts is the so-called “living trust,” more technically known as an inter vivos trust.

A living trust is a legal document that resembles a will. Like a will, a living trust stipulates how an individual’s assets are to be distributed, and the specific terms of those distribution plans. Unlike a will, however, a living trust operates during the lifetime of the person who set it up.

The intent of a living trust is to manage assets during periods of disability and at death. A common purpose for living trusts is to protect assets should the grantor become mentally or physically incapacitated. That is, it contains detailed instructions for the management of assets should the grantor become disabled, as well as directions for the distribution of assets at death.

Because they stipulate the disposition of assets at death, a living trust must dovetail with the terms of the grantor’s will.


So, let’s sum up the advantages of an irrevocable life insurance trust and see why most feel it is such an important part of any estate plan. . .

An irrevocable life insurance trust can be used by taxpayers who wish to remove not only substantial assets from their gross estates, but also any income from or future appreciation of those assets. This tax benefit is paid for by giving up complete control over the trust and trust assets.

By avoiding the insured’s estate, however, insurance proceeds in an irrevocable trust do not increase the decedent’s estate tax burden. Thus, they can be a source of income for the surviving family, while providing funds to pay estate taxes for the estate, but not from the estate. This can help avoid a forced sale of assets at the grantor’s death.  There are some issues that anyone considering an irrevocable life insurance trust will have to evaluate relative to their circumstances.  Questions to consider are will there be sufficient cash flow to cover the premiums?  Are there enough liquid assets so that the funds contributed to the trust will not be needed for future living costs?  You also want to understand the administration issues and costs involved with an irrevocable life insurance trust.

Be sure to get qualified professional help when establishing this or any type of trust.



Seek a lawyer, research and find the best fit for your estate.


For the 80 million Americans, social security is their only retirement income

There is a shortfall between what people have saved and what they’ll need to maintain their standard of living in retirement.

And, certainly, what Americans have put away for retirement is paltry. Unless we all start saving like crazy, the pundits say, we’ll have nothing to live on during our so-called golden years. Or we’ll all have to work into our eighties — if they let us.

But maybe we should look at it another way. For most Americans, Social Security will be their primary source of retirement income. Everything else — IRAs, 401k’s, even some old-fashioned defined-benefit pension plans — will be icing on a not-very-rich cake.

The reasons are clear. Tens of millions of Americans don’t have access to 401k’s or other retirement plans at work. And millions of families are barely earning enough to cover their current needs, let alone save for retirement.

Suggesting that Social Security will be Americans’ main source of retirement income may seem surprising; after all, the average monthly benefit is only $1,294, according to the Social Security Administration.

But it’s no surprise at all to Dallas Salisbury, president of the Employee Benefit Research Institute (EBRI), a Washington, D.C.-based group that publishes tons of research on the topic.

When I put the question to him in a phone interview this week, he said matter-of-factly: “That’s what all kinds of pensions have always been. The system always has been designed to supplement Social Security for individuals who have had continuous attachment to the labor force.”

That was true, he said, even during the so-called Golden Age when everyone supposedly clocked in for 30 years, then got a gold watch and a platinum pension check every month.

“For some people, a defined-benefit pension was Nirvana; for other people, it was terrible,” Salisbury told me. He pointed to EBRI data that showed individuals 65 and over who were in the lower 60 percent of incomes got 10 percent or less of their retirement income from traditional pension-benefit plans. That same group also depended on Social Security for up to 88 percent of income in 2010.

Indeed, the Social Security Administration reported that 64 percent of Americans ages 65 and older get more than half their income from Social Security. That’s nearly two-thirds of retirees.

It’s not difficult to see why.

Take the average monthly Social Security benefit, $1,294, and multiply it by 12 to get annual income of roughly $15,500.

How much would you have to save or invest to get that “annuity”?

Assuming a 4 percent annual withdrawal rate, I multiplied $15,500 by 25 and got $387,500. And remember, that’s per person. With an average benefit per couple of over $2,000 per month, those households would have to stash away more than $600,000 to surpass their Social Security benefits.

Unfortunately, the average U.S. household had retirement assets of $167,800 in June 2013, according to the Investment Company Institute, the trade association for the nation’s mutual fund companies.

Sarah Holden, the ICI’s senior director of Retirement and Investor Research, pointed out that Americans from 60 to 64 have on average nearly $360,000 in their defined-contribution accounts and IRAs combined.

Maximize your Social Security distribution
By delaying payments, you can increase your yearly distribution by 8 percent. Diahann Lassus shares her advice on ways to maximize your Social Security distribution.
 Description: The amount of social security that could be taxed is based on your filing status and your provisional income. Filing status is pretty self-explanatory — usually single or married filing jointly. Provisional income requires more explanation.

And the nearly three-quarters of Americans who take their Social Security benefits before reaching full retirement age are leaving a lot of money on the table.

But the biggest obstacle may be that in an era of stagnating incomes, many people just don’t make enough money to build retirement nest eggs.

The table below is a rough approximation of what a typical American household earns and spends.

Courtesy MarketWatch

When you subtract food, health care, mortgage payments, taxes, utilities and other necessities, not much remains for retirement saving. I estimate well under $10,000 a year for everything else, including movies, restaurants, family vacations, car expenses, child care, braces for kids, tutoring or counseling, and saving for college.

Maybe that’s why the average working household has virtually no retirement savings, according to the National Institute on Retirement Security.

“There are different forms of saving at different points in the life cycle,” Holden explained. “As they get to middle age, they begin to focus on retirement.”

True enough, but at that point they’ll have a lot of catching up to do. Holden points out that for lower-income households, “Social Security is going to give them a high replacement rate.” That’s because they’re used to living on less.

But those who aren’t face a rude awakening when they try to live primarily on their Social Security benefits. As Holden said at a conference last weekend, “Just because you have income for life doesn’t mean it’s adequate.”

“We can never insure 100 percent of the population against 100 percent of the hazards and vicissitudes of life,” President Roosevelt declared after signing the Social Security Act in 1935, “but we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age.”

Some measure of protection indeed. FDR could hardly have foreseen that eight decades later, Social Security would be the lion’s share of most Americans’ retirement income, and for many the only game in town.



Call Connie Dello Buono 408-854-1883 for a lifetime retirement income, tax-free with no market risk.

When Planning For Retirement by Lowell Herr

If you have made debt a part of your everyday life, you need to get rid of it as soon as possible, before you find yourself in retirement. Remember that during retirement, you don’t work for income. Whatever amount of money you get is through pension funds, and investment flow is not a regular source of income, and will be diminished at some point of time. Thus you can’t afford to use them up very fast.

Your retirement lifestyle in general should be subdued, not be laden with luxury. Moreover, you should ensure that you have adopted debt reduction strategies to at least diminish a great deal, if not completely do away with, your debts. You should also plan for your retirement from now onward. The best way to finance your retirement is to opt for an investment plan. A good investment portfolio can see you through your retirement years. Read on to know the steps you should take to ensure you have a proper retirement investment plan.

  1. Evaluate your risks. It is very important that you understand your risk tolerance level before you venture into an investment portfolio. This risk tolerance is not only emotional risk tolerance, but also financial. You should consider the sources of income you are likely to have, and the amount of risk that you can handle. Then you should allocate your assets based on the appropriate amount of risk that you can take and venture to make a portfolio.
  2. Decide on your post-retirement lifestyle. You should estimate your expenses after retirement, after considering the expenses you incur now. This you can do by considering the goals you want to accomplish. You have to approximate your monthly expenditures, which include insurance premiums, utilities, travel expenses and other daily expenditures. It is recommended by most financial experts that you draw out just about 4% of your assets in the first year of retirement, and then adjust according to inflation.
  3. Get assistance if you need it. Assessing your financial situation and thereby making a plan is not an easy thing to do. You might need help to carry this out. You can take help of online calculators that are available free of cost, and tools that can help you determine your expenditure pre- and post-retirement. You may also seek professional help from counselors who may give you one-time session or a long-term wealth management plan, depending on your choice.
  4. Consider the potential income streams. One of the foremost things to do while building a retirement portfolio is to consider income streams that can cover the expenses you will incur. The withdrawal rate can be diminished by adding money from income streams such as businesses and websites. Other sources of income can include any pension, inheritance and Social Security. You should evaluate your investment portfolio carefully and decide whether you would need to transfer some of your assets into investments such as stocks and bonds that generate income through dividends. Annuities are also a good source of income after retirement.
  5. Consider taxes. Taxes are an omnipresent part of your life that may not leave you even after retirement. You should do proper research and find out that some investment accounts, such as Roth accounts, don’t require you be taxed on withdrawals. However, there are many traditional investment accounts that grow tax-deferred. This means that when you make withdrawals from these accounts, you will be charged taxes as if they were regular income.


CPA, tax preparer and investment advisors love to work with us. We work in the asset protection side, no fee in our services as retirement planners and are more conservative with long-term outlook. Call Connie Dello Buono CA Life Lic 0G60621 for free tax free retirement planning at 408-854-1883 in 50 US states.

Discover your life’s purpose

Today I learned about a clearer picture of my life’s purpose. The life purpose calculator shows you the path to where your energies and focus are to attain the one thing that you desire the most. It is a compass, it is up to you to act on what is close to your heart. Heart above, feet on the ground.

Life can throw you many threats but prepare and surround yourself with people who can help you open to more ways to your path to success. All of us are creative and have energy, harness them well.


Connie’s comments: If you are tired of your work and wanted another way to success, call Connie 408-854-1883 to help others win the money game and build your business in retirement savings and helping families plan for their future.