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The Well-Planned Life: End of Life Planning

For all the complicated emotions that arise when one thinks of end-of-life planning, it's important to remember the goal of that planning—to reduce, as much as possible, the grief and stress your survivors will feel by making clear decisions about these matters now.


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Another reason to open a revocable trust for life insurance is to pay any federal estate tax your loved ones might owe if your estate exceeds the $3.5 million federal tax credit. “Many Hawaii families have expensive real estate properties but have limited cash to pay estate taxes,” explains Bolan. “Life insurance can help provide the liquidity to cover estate taxes, which are due six months after death.

“The families I work with don’t want to have to liquidate their real estate holding to pay taxes,” he continues. Bolan also says for large policies, it might be a good idea to set up an irrevocable trust to own the policy, since any policy you purchase, though tax free when paid out, is now a part of your estate. “That’s where you may want to work with advisers and lawyers,” says Bolan. “That way, they can set up an irrevocable trust, which puts the insurance outside of the estate making it tax free.”

But there are limitations for these policies, and it is important to read the fine print. Conahan recommends her clients speak with her first before they run out to buy any type of insurance related to their estate. “The life insurance guys, God bless them, want to sell you life insurance. They’re not going to make any more money by just giving you advice,” she says. “So, if you’re going to make an investment, like a $1 million life policy, you should probably also talk to an accountant and an attorney.”

Conahan further extends her policy to anything you might want to have sold after you die. “If you’re going to be selling any real estate or any asset stocks, it’s worth while before you do it to talk to an accountant or attorney,” she says. “Maybe there’s a better way to do it.”

Planning for the end can be a long and drawn out process. The pictures everyone seems to paint about the subject feel pretty grim. It’s your life we’re talking about, specifically, the final moments.

The worst thing to do, however, is nothing.

Take Janis Calton, for example. Now she feels better knowing her assets are going to the right people, and that she has advocacy in case the unthinkable should happen. “Emotionally it felt good to do it all, just to know that things are organized and set,” she says. “I would advise anyone middle aged to take the time to go over their assets and make sure they know what would happen to them if anything happens.”

Estate Tax Top Rates and Exemption Amounts

Calendar Year

Estate Tax Exemption

Top Estate Tax Rate

2008$2 million45%
2009$3.5 million45%
2011$1 million55%
2012$1 million55%
2013$1 million55%
2014$1 million55%


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Honolulu Magazine February 2018
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