Advice Could Cost the Kids Half the Nest Egg

I’m confused! The recommendations [“Planning Ahead Brings Happy Predicament in Retirement,” Money Make-Over, March 3] provide a wide-shot pattern of planning tools related to the couple’s desire for “ways to preserve wealth, manage an expected inheritance and provide for . . . children and grandchildren.” However, to avoid life insurance and long-term care with such financial goals and assets may not be the wisest course.

Protecting assets with an irrevocable insurance trust to pay inheritance taxes after the second death can be a very useful estate-preservation strategy.

Long-term care in today’s dollars is a $45,000-per-year expense and can be purchased with a return-of-premium rider. If the policyholder doesn’t claim the benefits before death, they are returned to the estate.

In addition, since the bulk of assets are in IRAs, strategies for beneficiary distribution need to be addressed, or the kids may end up paying immediate income tax and inheritance tax on these funds, losing more than half the nest egg.

THOMAS E. KOLANOSKI

Certified Financial Planner

Costa Mesa