Planning for Today’s Family

0269673-00001-00 Ed. 11/2014 Exp. 05/05/2016

© 2014 Prudential Financial, Inc. and its related entities.

PRESENTED BY:

Joe Sample, [Designations per field stationery guidelines][Company Approved Title][Agency Name] [The Prudential Insurance Company of America][if Agency Distribution][1234 Main Street, Suite 1, Floor 10][Anywhere], [ST] [12345][in required states] [<ST> Insurance License Number <1234567890>]Phone [123-123-1234] Fax [123-123-1245] [joe.sample@prudential.com]

Roadmap

Important to Consider the Insurance Needs of:

Stay-at-home Spouse

Blended Families

Children with Special Needs

Non-citizen Spouses

Closely-Held Business Owners

Family Member with History of Substance Abuse

Same Sex Couples

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“Typical” Family Scenario

Agent John meets Randy and Teri through their country club. John learns that they have 2 kids at home – ages 10 and 2. He sits down to discuss their insurance and planning needs.

John is thinking – Income replacement for Randy in the event he dies early. They live in the right neighborhood and drive a nice car – so he must be a candidate for a large term sale. Maybe even an estate tax liability – but unlikely with today’s high exemptions.

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Fact: Randy Travels Nearly Half the Time for Work

• How would he pay for child care and other expenses if something happened to Teri?– Live in Child Care– House Management

• How much insurance does Teri have?• When did you last review the existing policy or life insurance plan

on her?

Needs Analysis – But, Did He Consider Insurance on Stay at Home Spouse?

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Fact: These are Only 2 of 6 Kids!• After asking some preliminary questions the agent learns that Randy is

55 years old and Teri is 35– Randy has 4 adult children from previous marriage– The 10 year old is Teri’s child from a previous marriage– The 2 year old is the only child from this marriage

• What is the estate plan?• Randy’s oldest child is 30 years old – Only 5 years younger than his

current wife.• Does will/revocable trust leave all Randy’s property to wife and then to

kids?• Does he need insurance to take care of his wife if leaving property to the

kids? Or insurance to leave to kids if leaving property to wife?

Needs Analysis – But What About Older Kids?

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Questions: What about Teri’s Child?• What about the child that isn’t biologically the child of the working

spouse?• Is the father in the picture?• What would happen if Teri died?• Is father financially responsible?• Is there an intention for Randy to adopt the child?

• Do they need insurance specifically to address the planning needs for this child?

Needs Analysis – His, Hers and Theirs

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Fact: Teri is a Mexican Citizen

Concerns:• Taxes - Marital deduction unavailable• Long Term Care – Randy and Teri love Mexico and

might just retire to Mexico. Will their LTC or Chronic Illness product cover them in their Mexican retirement?

Don’t Assume Citizenship

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Fact: Anastasia, Teri’s 10 yr old daughter, has Special Needs:

Teri stays at home to care for Anastasia, who requires assistance in many daily living activities. In the future, Randy and Teri believe that Anastasia may be able to live outside their home. But, she may not be able to support herself.

Concerns:• Are there enough financial resources to provide acceptable

care for Anastasia?• Is planning done in a manner not to disqualify her from

government assistance?• Do they have a competent attorney to advise them on special

needs planning?

Special Needs Requires Special Planning….

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Needs Analysis – Special Needs

Questions to Ask:• Have you considered who will take care of

Anastasia if something should happen to Custodial Parent? Both parents?

• Does Anastasia receive (or might she receive in the future) any public benefits?

• Have parents considered a daily lifecare plan and/or letter of intent for other caregivers?

• Have they considered a special needs trust?• Do the parents have a capable attorney?

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Fact: Randy Owns His Own Business and One Child is Active:

Randy is in the publishing business. He started his enterprise over 20 years ago. It is successful. One of his young adult children is active in the business and a possible successor.

Concerns:• Does he have capable management to transition the business

to his child if something should happen to him?• Does he need some kind of key person insurance to create a

“Golden Handcuff” for the key manager?• Does he need key person insurance for himself?• What is the plan to divide the estate? Would step-mom

become owner? Is this an estate equalization case?

Family Business Planning is Estate Planning

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Fact: One Adult Child has a History of Substance Abuse:

When discussing the family business, Randy mentions that one of his adult children isn’t capable to run the business at this time because of a history of substance abuse.

Concerns:

Is inheritance left in an appropriate trust?

Same termination at ages 25, 30, and 40 as other kids probably not appropriate.

Maybe consider an “incentive trust” that only pays directly to child when sober?

Trustee can pay directly for cost of treatment.

Child with History of Substance Abuse

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Same Sex Relationships

It’s important to understand nuances of same sex planning regardless of local law.

Independently Wealthy Children

Integration of Planning for Living Parents

Multiple U.S. or Foreign Residences (where to retire)

Dual Citizenship Issues

The real point is probably this – What is “Typical” is that Families are Unique.

Other Typical Family Scenarios

This material is designed to provide general information in regard to the subject matter covered. It should be used with the understanding that it does not constitute legal, accounting, or tax advice. Such services should be provided by your own professional advisors. Accordingly, information in this document cannot be used for purposes of avoiding penalties under the Internal Revenue Code.

All guarantees and benefits of the insurance policy are backed by the claims-paying ability of the issuing insurance company.  Policy guarantees and benefits are not backed by the broker/dealer and/or insurance agency selling the policy, nor by any of their affiliates, and none of them makes any representations or guarantees regarding the claims-paying ability of the issuing insurance company.

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Important Information

Life insurance is issued by The Prudential Insurance Company of America and its affiliates. All are Prudential Financial companies located in Newark, NJ, and each is solely responsible for its own financial condition and contractual obligations.

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Securities and Insurance Products:Not Insured by FDIC or Any Federal Government Agency. May Lose Value.

Not a Deposit of or Guaranteed by Any Bank or Bank Affiliate.

Important Information