How to Make Your Estate Plan EPIC Financial Advisor

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What is EPIC estate planning? Your Life. Your Legacy. Your EPIC.

Your estate planning concerns Is my estate plan up-to- date? How much should I give to my kids? Can I protect them? What about taxes? How much should I give to my community? Do I have enough life insurance?

Traditional estate planning –Discussions centered on: What is the status of estate taxes? What is the newest estate planning strategies? Is estate planning just planning after your death? –These discussions are important but they may miss the central objective How to help maximize your estate During life and at death

Estate planning decisions Faced with the repression of the “OR” Do I live less today, in order to give more tomorrow? OR Do I live more today, and simply give less tomorrow?

What is EPIC estate planning? One definition of epic is: Ep·ic adjective \ ˈ e-pik\ “extending beyond the usual or ordinary” EPIC estate planning –Process of helping make your estate plan extend beyond traditional estate planning Source:

EPIC estate planning decisions EPIC embraces the brilliance of the AND I want to maximize how i live today and I want to maximize what I give tomorrow

What is EPIC estate planning? Stands for Estate Planning Individually Centered –Planning centers around you Maximizing the EPIC Circles Minimizing the four estate planning threats –An EPIC approach for EPIC Team: You Your advisor/agent/CPA/tax professional Your estate planning attorney

The EPIC Circles Your Life. Your Legacy. Your EPIC.

It begins with…

Next, comes… Your Descendants Children Grandchildren Other beneficiaries Children with Special Needs “… person should leave his kids enough to do anything but not enough to do nothing.” Warren Buffet

It ends with… Community Foundations Government Federal State Local

EPIC circle

However, not all families are the same… Single parents Blended families Non-citizen spouses Partners (unmarried couples)

Four Estate Planning Threats Your Life. Your Legacy. Your EPIC.

Taxes

Old paradigm – get it out Large gap between federal transfer and income tax rates In 2001: –Unified credit was $675,000 and top tax rate was 55% –Long term capital gains was 20% Estate Tax 55% Capital Gains Tax 20 % Gap is 35% Source: Internal Revenue Service

New paradigm – tax basis opportunities Smaller gap between federal transfer and income tax rates In 2014: –Basic exclusion is $5.34 M and top tax rate was 40% –Long term capital gains was 20% + 3.8% Health Care Surtax Estate Tax 40% Capital Gains Tax 23.8 % Gap is 16.2% Source: Internal Revenue Service

Creditors TaxesCreditors

Protections Three areas of protections 1.Client –Retirement income, long term care costs, asset protection 2.Spouse or Partner –Income replacement, remarriage, retirement income, asset protection 3.Descendants –Asset protection, divorce, spending, special needs, blended families

Spending TaxesCreditors Spending

Three buckets of assets Capital assets Retirement income assets Legacy assets

Capital asset taxation TimingTax consequences PurchaseAfter tax Income generatedOrdinary income SaleCapital gains Long term Short term Disposition at deathFair market value at date of death Can get a step-up or step-down in basis

Retirement income assets TimingTax consequences ContributionQualified - before tax Non-qualified - after tax GrowthTax-deferred DistributionsOrdinary income Qualified – all ordinary income Non-qualified – exclusion ratio Disposition at deathNo step-up

Legacy assets TimingTax consequences PurchaseAfter tax GrowthTax-deferred DistributionsTax-preferred Dispositions at deathAutomatic step-up in basis

EPIC retirement spending Use retirement income assets Efficient use of capital assets Efficient use of legacy assets

EPIC estate planning Use retirement income assets as an income source for the surviving spouse Maximize capital assets at death with estate inclusion to receive step-up in basis Use legacy assets for income tax-free death benefit

Death TaxesCreditors Spending Death

Why is life insurance important? Periodic small gift transfers of premium can provide larger death benefits Income tax-free financial support for clients’ families upon their death Cash value – valuable tool if client needs to withdraw a portion for any reason Additional agreements may enhance the life insurance policy Agreements may be subject to additional costs and restrictions. Policy loans and withdrawals may create an adverse tax result in the event of a lapse or policy surrender, and will reduce both the cash value and death benefit.

EPIC TaxesCreditors Spending Death

Definition of an EPIC estate plan I want to maximize how live today –By tax-efficient spending In order to maximize what I give tomorrow –By protecting my family if an unexpected event happens –By passing my estate in the most tax-efficient manner possible –By protecting my legacy for my descendants –By turning tax dollars into charitable dollars

Other side of EPIC Estate Planning Another definition of an epic Ep·ic noun\ ˈ e-pik\ “a narrative poem in elevated language celebrating the adventures and achievements of a legendary or traditional hero.” The other side of EPIC estate planning is: –Estate planning is more than passing material wealth –It’s your values, hopes, and dreams –It’s the memories you create Source:

Next Step Please take our EPIC fact finder Take some time to reflect and answer the questions Set up an initial meeting with your advisor(s) to start the EPIC process

Make it EPIC! Any questions? Securian Financial Group, Inc Robert Street North, St. Paul, MN Insurance products are issued by Minnesota Life Insurance Company in all states except New York. In New York, products are issued by Securian Life Insurance Company, a New York authorized insurer. Both companies are headquartered in Saint Paul, MN. Product availability and features may vary by state. Each insurer is solely responsible for the financial obligations under the policies or contracts it issues. 400 Robert Street North, St. Paul, MN Securian Financial Group, Inc. All rights reserved. A DOFU Please keep in mind that the primary reason to purchase a life insurance product is the death benefit. Life insurance products contain fees, such as mortality and expense charges, and may contain restrictions, such as surrender periods. One can lose money in this product. Guarantees are based on the claims-paying ability of the issuing insurance company.