The following eight steps are part of a technique that I have developed specifically to appeal to a prospect “who has indicated a concern for a spouse and the quality of life that special person will live with after the prospect is gone.” For the sake of the case study, I have assumed that the prospect is a husband who indicates a concern for his wife.
Step 1. Introduce the First Bucket. Mr. Prospect, let’s suppose that you became part of the grill on a Mack truck last night. Today we’re putting your estate plan into action. That would require us to divide your assets between two important buckets. We’ll start with the bucket that is obviously the first bucket. The number tells us so.
Step 2. Public Bucket. This bucket is called the Public Bucket because it is known to the public. Certain members of the public are very interested in the contents of the bucket. The major portion of your estate will end up in Bucket No. 1. That’s because most of your assets will be controlled by you at death and, as such, will be included in your estate for transfer purposes.
Step 3. The line at the Public Bucket. I mentioned that a lot of people will be interested in the assets going into the Public Bucket. They’ll line up and eventually take assets from it. I can’t tell you how long the line will be at your Public Bucket, but I can tell you who will be last in line. It will be the woman you’re walking through life with. She must wait for the entire line to be satisfied before she can take anything from the bucket. Note: Current U.S. law provides for an unlimited marital deduction. You should know about it. Simply put, it allows for a delay in paying the estate tax until a second death. That, of course, would remove the estate tax people from the line on the initial death. The line would still be plenty long, right?
Step 4. Private Bucket. There are two buckets into which your assets must be distributed. The second is called the Private Bucket because it is relatively unknown to the public. As such, they are not interested in it. The assets that find their way into this preferred bucket do so as part of some special planning.
Step 5. The shorter waiting line. The advantage of the Private Bucket can be seen in the length of the line waiting to draw assets from it. The line is very short. It numbers only one! And, I can tell you who that person will be. It’s the woman you’ve told me you are concerned about–the one you’ve been walking through life with.
Step 6. How much? Given the choice between these two buckets and the way assets will be handled through them, which bucket would you like to have your assets in? Next, how much would it take in the Private Bucket to guarantee your wife’s quality of life beyond any reasonable doubt? Keep in mind that I will deliver the sum you select in cash in a few days after you are gone.
Step 7. Final consideration. We have a final consideration. Filling that bucket doesn’t just happen. We both know that there is no such thing as a free lunch, right? We can’t fill that bucket without it costing you or your company something. The good news is that it will take pennies on the dollar. The options are exciting. Let me make a logical suggestion: Why don’t we go to work and investigate the numbers as they apply to you? Technical comment: Life insurance proceeds do not go automatically into the Private Bucket. You must arrange them properly in the inception. That project is your responsibility. You should seek the help of an informed associate, manager, or teacher. Anything short of complete understanding is dangerous to you and your clientele.
Step 8. Worksheet. This is a piece you may use to record the answer to the question asked in Step No. 6. The response will tell you how much insurance he needs to direct to the Private Bucket. Good style would dictate that you do everything possible to move his current coverage into the bucket also.