4 Tips to Get Started on Estate Planning

As published in Star Advertiser on March 13, 2018.

Control Your Assets

For most people, the word “estate” brings up images of multi-million-dollar mansions. Perhaps this is why, according to a 2016 survey from WealthCounsel, nearly half of Americans believe estate planning is only for wealthy people.

In the context of estate planning, “estate” means all the property a person owns or controls: personal property, real estate, bank accounts, insurance policies, businesses, certain trust accounts and debts. That’s why estate planning is relevant for most adults, especially those with children, businesses and any assets they’d want to see go to the right people in the event of their death.

When it comes to estate planning, it can be difficult to know where to start. Make sure to check the following important items off your list.

Prepare Your Will

According to WealthCounsel, 60 percent of Americans don’t have a will. Many people wrongly assume that they don’t need a will because their largest accounts already have beneficiaries named. However, a will addresses your most precious assets such as your home, family heirlooms and most of all, your children.

A will is the only document that can designate a guardian for your children in the event of your death. Without a legally binding document, the courts will step in to decide who will raise your children.

Sign a Power of Attorney

If you were to become incapacitated, who would pay your bills, handle your money and deal with your assets? Signing a durable power of attorney appoints a loved one of your choosing, usually a spouse, adult child, sibling or close friend, to make financial decisions on your behalf.

The agent you designate would not have ownership rights over your assets. He or she would have a fiduciary duty to use your money for your benefit only. A power of attorney expires at death, and any money left in the account would become part of your estate.

Consider Life Insurance

If you don’t have life insurance, consider it an important part of your estate planning. Life insurance can provide financial security to the people you leave behind, especially if you have children and a spouse who relies on your income to pay the mortgage and other living expenses.

If you’re financially secure enough to provide for your family in the event of your death, consider that life insurance can be used to pay potential estate taxes. If your beneficiaries will have to pay a significant amount in estate taxes, you can take out a life insurance policy in that amount. Your beneficiary will be able to use the tax-free insurance proceeds to pay taxes on your estate.

Minimize Taxes

Use tax-efficient strategies to help lower the amount of taxable assets you leave for your beneficiaries. If you know that you’d like to leave money for your children and grandchildren, consider gifting that amount to them while you’re still alive. You can gift up to $13,000 per recipient on an annual basis without having to pay gift taxes, which reduces the taxable value of your estate. Placing this gift in a 529 college saving account allows for tax-free growth if the funds are used for qualified educational expenses.

If you plan on leaving some of your estate to charities, be sure to designate taxable assets for this donation. Leave tax-free assets, such as your Roth IRA and life insurance, to your heirs to reduce their tax burden.

Enlist a state planning attorney, use our free retirement calculator, attend a complimentary seminar, tax professional and financial advisor to help you create and execute a plan that best fits your situation. Taking the time to make these decisions will ensure you’ll be able to take care of your beneficiaries, even after death.

For more information, attend a complimentary seminar, “Estate Planning Essentials,” conducted by John Melchor, CFP®, CFS® with Jackson National Life Distributors**, on March 24 at 11:30 a.m. at Pomaikai Ballrooms in Dole Cannery.  Learn how you can preserve your estate by implementing some simple trust strategies. If you’re interested in attending, please register at www.hawaiistatefcu.com/events.

*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. The credit union has contracted with CFS to make non-deposit investment products and services available to credit union members. CFS does not provide tax advice. For specific tax advice, please consult a qualified tax professional.

**John Melchor, Jackson National Life Distributors and its subsidiaries are not affiliated with Hawaii State FCU, CFS or any of its representatives.


David Kimura - Investment Program Manager CUSO Financial Services, L.P.

About David Kimura

David Kimura is the CUSO Financial Services LP (CFS*) investment program manager for Hawaii State Investment Services at Hawaii State Federal Credit Union providing investment, retirement and financial planning services to members. He can be reached at dkimura.cfsinvest@hsfcu.com or (808) 447-8083.


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