AMERICANS ARE GENERALLY LIVING LONGER, healthier and more active lives—making it more important than ever for them to plan for those additional years. Whether your goals for later in life include continuing to work, traveling, spending time with family or supporting your favorite causes, taking simple steps now can give you the power to shape the future, pursue what matters most to you and have confidence that you have prepared for whatever the future may hold.
While it’s easy to put off this kind of planning, it can be an exciting process, particularly as you think about the opportunities you have to make a difference in the lives of people you care about. As noted in Leaving a Legacy: A Lasting Gift to Loved Ones, a new study by Merrill, conducted in partnership with Age Wave, your legacy encompasses much more than the assets you leave behind. Just as important are the values you impart and the steps you take to make the lives of those closest to you easier. In fact, one of the most meaningful gifts you can give loved ones is to simplify their lives by creating a document that outlines your wishes for later life, lays out a plan for future financial decision-making and provides easy access to your critical legal and financial records.
If it all seems a bit daunting, it needn’t be. Your Merrill financial advisor has resources that can help to make it easier to bring your legacy planning into focus, organize your important information and identify steps you may want to take to help make your vision for the future a reality.
Trusts—a powerful but often overlooked
legacy planning tool
A trust could be a critical element in your plan. As Michael Pelzar, Head of National Trust Services at Bank of America,* points out, “Many people assume that trusts are used only by very wealthy individuals who are looking to minimize taxes. But they can be a powerful legacy planning tool for many people. That’s why we encourage anyone who has $3 million or more in assets, or lives in a state with an estate or inheritance tax, to consider a trust."
One option is a revocable or “living trust.” It’s a highly flexible type of trust that can be structured in a way that enables you to:
- Access assets in the trust at any time for any reason
- Keep assets in the trust out of probate, thereby helping simplify estate settlement and minimize or avoid probate fees
- Arrange for professional portfolio management now, or in the future, should you no longer wish or be able to manage the assets yourself
- Direct how you want assets in the trust to be distributed and used, and may help if you are looking for ways to minimize federal or state wealth transfer taxes
Consolidating assets in a revocable trust allows you to simplify financial management and take advantage of bill payment or tax reporting services—which can give you more time to spend on the things that matter most to you. And, almost any type of asset can be placed in a revocable trust: cash currently held in a checking or savings account, securities held in a brokerage account, private equity or hedge fund holdings, investment real estate or private business interests, even a home. A revocable trust also gives you the flexibility to name yourself or someone else to serve as trustee, and to change the terms of the trust any time you wish.
A different type of trust—an irrevocable trust—may be useful if you:
- Want to make a significant gift now, but protect the assets and control how they are managed and used
- Live or own property in a state that imposes estate or inheritance taxes and are interested in strategies to minimize taxes
- Anticipate that your estate may be subject to federal estate taxes now or in the future, when the estate tax exemption is scheduled to return to the $5 million inflation-adjusted amount
- Are interested in using life insurance to equalize inheritance, provide an inheritance of known value or provide liquidity to offset potential estate taxes
Your Merrill financial advisor, together with trust professionals from Merrill and Bank of America, can help you decide if a trust could be a useful element of your legacy plan, and can also explain the ways that Bank of America may be able to help.
Help every step of the way
If you haven’t created a legacy plan—or updated an existing plan as a result of the 2017 Tax Act—contact your Merrill financial advisor. Your advisor is there to help at every step along the way, and can provide access to resources to help simplify the process as you explore the possibilities.
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* Trust and fiduciary services are provided by Bank of America, N.A., Member FDIC and wholly owned subsidiary of Bank of America Corporation (BofA Corp.).
Age Wave is not affiliated with Merrill Lynch.
This research is based on a survey fielded in September 2018, conducted by Merrill Lynch in partnership with Age Wave and executed by Kantar TNS utilizing the Kantar Lightspeed Panel, along with selected panel participants. The survey includes more than 3,000 respondents in the U.S. 18+ with a focus on Americans 55+. Respondents were weighted to reflect the U.S. population including a representative sample of Americans who rated their health as fair to poor.Additionally, two focus groups were conducted in June 2016, where qualitative information was gathered about older Americans’ emotions, preferences, experiences and needs regarding end-of-life planning and thoughts on leaving a legacy.