How to use Estate Analysis

The Estate analysis screen visualizes how assets flow to a surviving spouse and clients' heirs in a dynamic environment.


To access the estate analysis tools select open client next to the desired client, then select Estate from the top navigation once the client's portal loads.

Key Takeaways

  • Track important estate planning objectives & beneficiaries
  • Visualize how a client's finances will flow to their beneficiaries
  • Learn how to model various Trust options to strengthen the client's financial goals

There are three tabs under Estate: checklist, beneficiary and analysis. All three are covered here; let's dive in:

Checklist

The Checklist is a simple way to keep track of important estate planning tasks. If an item is checked off the list, RightCapital will display additional fields that can be entered.

For example: If a client has created a Power of Attorney document, they see additional options to:

  • Indicate the Power of Attorney's name
  • Indicate when the document was last updated.

The action items at the bottom of the checklist screen allow advisors to make client facing notes related to the objectives above. The edit button allows users to select which checklist items will display on the screen and report.

Beneficiary

This screen allows users to track beneficiaries for bank, investment, and life insurance accounts. The beneficiary can be another member of the family, ‘Trust’, ‘Charity’, ‘All children’, ‘All grandchildren’, or ‘Custom’, allowing any freeform text to be added. Use the "Edit" button within the action items to adjust the accounts listed in the beneficiary review.

Note – Any beneficiary entered is only stored for tracking purposes only; the entry of a beneficiary does not impact the Estate analysis section or any other portion of the system.

Analysis and the Flow sub-tab

The Analysis tab defaults to the Flow sub-tab. The Flow tab provides comprehensive modeling tools and an accessible visualization of assets flowing from the client to their heirs. Click on the individual boxes to see expanded data that culminates into the value shown. You can open all boxes except Inheritance, Total tax & fees, Estate to heirs, Total to heir, and Total to charity.

This powerful visual tool allows clients to see with clarity through the sometimes murky waters of estate planning — continuing to elevate your services as a critical component to your client's retirement success!

Basic Information

Use the Estate Analysis action items to enter basic information that affects the flow of assets from clients to their heirs.

Client & Co-client's Planning horizon: Adjust the planning horizon to illustrate what changes occur in the estate if clients pass away at different times. Changing the planning horizon in the Flow chart > Action Items will not impact any other modules within the software.

Funeral Expense: Funeral expenses are input in today's dollars within the basic information area. These expenses will be automatically added to the taxes and fees area within the analysis flow chart.

Probate Expense: Probate expenses are added as a percentage of the gross estate and will automatically factor into the taxes and fees area within the analysis flow chart.

Cumulative Gift: Generally, no estate taxes are due if the estate value is less than the lifetime gift/estate exemption of $11.7 million (for 2021). However, that exemption may be reduced throughout the client's life if they make gifts that exceed an annual gift exclusion ($15,000 in 2021). If a client has made gifts in excess of the annual exclusion, the total value can be entered in the cumulative gift field. The value entered in this field will reduce the gift/estate exemption when calculating estate taxes.

Gift Tax Paid: This field addresses a scenario where clients make gifts in excess of the annual gift exclusion but choose to pay the taxes in the year that the gift is made. The estate tax calculated will be reduced by the total “gift tax paid”.

RightCapital will automatically calculate federal estate tax if the gross estate exceeds $11.7 million (for 2021) in today's dollars. State estate tax is not automatically calculated within the estate analysis.

Enabling Trust Strategies

Use the Estate > Analysis > Action Items to illustrate moving assets from taxable investments into a Credit Shelter Trust, Charitable Remainder Trust, Spousal Lifetime Access Trust, Grantor Retained Annuity Trust, Intentionally Defective Grantor Trust, or paying premiums into an Irrevocable Life Insurance Trust. This area allows you to simulate multiple trusts strategies within a client's estate plan.

Use the steps below to enable multiple trust strategies:

1

Click Edit under the Action Items section:

2

Select Add New Trust on the bottom left side of the screen to open the menu of available options.

3

Choose the type of trust, then use the data fields to identify parameters for each Credit Shelter Trust, Charitable Remainder Trust, Spousal Lifetime Access Trust, Grantor Retained Annuity Trust, Intentionally Defective Grantor Trust, or Irrevocable Life Insurance Trust.

4
Click Save on the bottom right to visualize the impact of new Trusts in the Estate > Analysis.
5
Use the action items to include or exclude trust strategies built-in the Estate > Analysis > Action Items.

Comparison sub-tab

The Comparison tab illustrates the impact of any changes made under the 'Action Items' to the specific parameters or trust strategies.

See the impact of the strategies indicated in the Action Items section on the value passed to heirs and any amount given to charity, as well as the impact on the total taxes, fees, and expenses.

If Income is selected under the drop-down box, you will see a chart showing the client's income, similar to the Retirement Analysis Income tab. This will factor in the impact of any trust income specified.

Details sub-tab

The Details tab provides a list of categories that, together, represent the monetary values reflected in the Flow tab.

Trust sub-tab

The Trust tab allows you to see the annual asset breakdown for each trust entered in the financial plan. The trust tab will only appear if an irrevocable trust is entered in the Profile > Net Worth or proposed in the Estate > Analysis > Action Items. Use this tab to discuss annual trust balances, returns, taxes, fees and distributions.

For assistance leveraging the Estate module, please contact RightCapital Support.