Flexible estate planning strategies

[Narrator] The need for flexible estate planning strategies in an ever-changing environment.

Your goal may be to leave behind a legacy, or support a charitable organization, to protect the ones you love, keep family wealth in the family, or just preserve family harmony after you’re gone.

Whatever your motivation, estate planning presents a unique challenge involving the transfer of everything you’ve worked a lifetime to accumulate, all at once, at some unknown point in the future. That could be 20, 30, or 40 years away – and you won’t be there to give guidance when it happens.

And while there are a number of strategies for accomplishing your goals, many require making decisions today with limited ability to make modifications should circumstances change.

And there’s a strong likelihood that there will be changes. Tax laws may change. The federal estate tax has gone through numerous changes due to legislation passed over the last 20 years.

Your family dynamics may change – grandchildren may become part of the family or your children may get married, bringing in sons and daughters-in-law.

And your own financial needs may change as the family business grows or goes through financial struggles, the economy accelerates or slows down, and your need for income changes.

So as you work with your professional tax and legal advisors to implement a plan to accomplish your estate planning goals, consider building in a level of flexibility. This flexibility can come in a number of different forms.

For example, if you have an asset like a vacation home and would like to avoid the estate taxes, well, there are strategies to remove it from your estate while still allowing family members to retain the use of that asset.

If your goal is to keep family wealth in the family, there are strategies to protect those assets while still allowing you access to income generated from those assets.

If your estate planning strategy calls for you to gift specific assets to your children, there are ways to do this while retaining the right to bring that asset back into your estate if you desire.

Or, if you just want to help ensure your estate is transferred in a way to help avoid family disputes, there are strategies for that, too, while retaining the right to change your mind on who is to receive your estate.

[On-screen disclosure] Consult with your attorney and tax advisor to discuss your specific situation. [End of on-screen disclosure]

Finally, the type of assets in your estate can provide flexibility, too.

Assets that are easy to pass on, manage, and are easily divided, may allow you to accomplish your goals better than assets that are difficult for your beneficiaries to receive, manage, or divide.

For example, life insurance in an estate plan can provide funds to your beneficiaries through the death benefit, while avoiding the time and costs associated with probate – assuming the policy is structured properly.

[On-screen disclosure] Death benefit is generally passed on-tax free to beneficiaries. [End of on-screen disclosure]

This money can help accomplish your goals upon your death, whether it’s to help pay estate taxes, help family members acquire the family business, or simply provide a legacy (through the death benefit) that is easily allocated among beneficiaries.

And if the insurance you choose is fixed index universal life insurance, along with the other benefits of life insurance, you have the potentially to accumulate cash value that can add to your legacy or be accessed via loans and withdrawals during your life.

[On-screen disclosure] Policy loans and withdrawals will reduce the available cash values and death benefits and may cause unintended consequences, including lapse or taxable events. Please see full loans and withdrawal disclosure within this material for details. [End of on-screen disclosure]

Remember, flexibility isn’t just about how you pass on your estate, it’s also about what you pass on.

Talk to your legal, tax, and financial professionals to discuss how fixed index universal life insurance can help to build flexibility into your estate plan.

[On-screen disclosures]

FIUL is subject to qualification through health and financial underwriting.

Policy loans and withdrawals will reduce the available cash value and death benefit and may cause the policy to lapse, or affect guarantees against lapse. Withdrawals in excess of premiums paid will be subject to ordinary income tax. Additional premium payments may be required to keep the policy in force. In the event of a lapse, outstanding policy loans in excess of unrecovered cost basis will be subject to ordinary income tax. If a policy is a modified endowment contract (MEC), policy loans and withdrawals will be taxable as ordinary income to the extent there are earnings in the policy. If any of these features are exercised prior to age 59½ on a MEC, a 10% federal additional tax may be imposed. Tax laws are subject to change and you should consult a tax professional.

Allianz Life Insurance Company of North America does not provide financial planning services.

This content is for general educational purposes only. It is not intended to provide fiduciary, tax, or legal advice and cannot be used to avoid tax penalties; nor is it intended to market, promote, or recommend any tax plan or arrangement. Allianz Life Insurance Company of North America, its affiliates, and their employees and representatives do not give legal or tax advice. Customers are encouraged to consult with their own legal, tax, and financial professionals for specific advice or product recommendations.

Guarantees are backed solely by the financial strength and claims-paying ability of Allianz Life Insurance Company of North America.

Products are issued by Allianz Life Insurance Company of North America

5701 Golden Hills Drive, Minneapolis, MN 55416-1297. 800.950.1962. www.allianzlife.com

P64339

AMK-510 (11/2020)

[End of on-screen disclosures]