Contingent Planning

I've used E$Planer for several years, but just setup contingent planning for the first time. My spouse and I are just past our mid-fifties and she's currently out of the work force. Her standard of living is extremely low until retirement age even though my life insurance currently exceeds the the recommended amount in the standard report. The survivor spreadsheets clearly show my retirement assets transfer to her; is it necessary to enter a special revenue entry for the year she receives my life insurance benefit?


dan royer's picture

So of course ESPlanner doesn't know anything about how much term insurance you really have--it only knows what it recommends. Now what you can do is in the Estate folder set your wife's living standard to raise by (guess) 5% and see if that brings the life insurance up to what you actually own--and thus shows her living standard up to what you'd like in the event of your death as a consequence.

So 5% or 6% raise in the survivor's living standard may be enough to adjust things. The program sees that she has the insurance to cover her "life" but that's no consolation in the short term. So try adjusting the settting in Estate folder.

Also make sure that you eliminate any special expenses unique to you in special expenditures if such things exist.

Since I've entered life insurance face value and cash value for me and my spouse in the 'Life Insurance' tab of the Estate folder, ESPlanner does know this information - it just doesn't seem to be using the data.

Since insurance is a non-taxable distribution upon death, would adding it to the revenue tab of the special expense folder of each spouse properly account for it?

dan royer's picture

When you enter amounts in the EState area, it uses that amount to contrast with the recommended amount for the first year (see current year recommendation report). That's not so useful I suppose.

If you own more insurance than the recommended amount, then use the estate folder to raise the survivor's living standard. That will raise the recommended amount and perhaps solve the issue of an even living standard in the contingent planning report.

You could also use contingent special receipt to model the insurance payment in a given year. But you would need to first pick a year to run a survivor report on and add the receipt for just that year.

I feel it's more elegant and easier to use the living standard in estate folder to raise survivor living standards until they match your actual insurance holding or beyond.

We use cookies to deliver the best user experience and improve our site.