Waterfall Concept
Candlefocus EditorAside from the financial benefits, such as reducing estate taxes and probate costs, there are also other benefits to utilizing waterfall concepts for estate planning. One such benefit is the avoidance of probate court proceedings and associated legal costs, as the transfer of assets is done outside of the probate system. This can help heirs avoid a costly, time-intensive formal court process in the event of an estate or trust dispute.
When utilizing the waterfall concept, an older generation will purchase a life insurance policy covering the younger generations who are to inherit the wealth. Money is then paid out from the policy over time, usually on an annual or semi-annual basis. Some policies even provide the ability to make regular monthly payments, allowing for greater flexibility in how and when the wealth is transferred.
Waterfall concepts are ideal for anyone looking to transfer wealth from one generation to the next, as they can provide several advantages over traditional estate planning methods. Not only do they help mitigate estate taxes and associated costs, but they also help streamline the process of transferring wealth between generations. This can provide heirs with a quick, low-cost way of accessing their inheritance.
Therefore, the waterfall concept is an excellent estate planning strategy that can help efficiently and securely transfer wealth in an intergenerational manner.