OUR PROCESS

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Estate planning attorneys are the most important advisors when it comes to the estate planning process because they have the greatest understanding of all of the possible estate planning options available to the client.  Estate planning attorneys are also “fee based” which greatly reduces the chance that their advice is biased (skewed toward a specific investment product or legal structure).  Accordingly, the client should rely primarily on the estate planning attorney’s review and recommendations before making any new changes to their estate plan or estate tax mitigation strategy.

Here is the Blue Star recommended process for how we can help estate planning attorneys serve their clients:

1. Don Prehn, President of Blue Star, has an initial phone call with the estate planning attorney to review Blue Star’s financial modeling capability and show some case studies of when life insurance was used to help clients reduce or fund estate tax liability.  The attorney then determines if any of these services could possibly be useful to any of their clients.
2. For any client where Blue Star’s financial modeling/life insurance services are possibly useful, Don Prehn and the attorney schedule a 20 to 30 minute introductory call with the client to get some general information about the estate. All client information is confidential.  If requested, Blue Star and Don Prehn will sign an NDA.
3. Blue Star then creates a customized financial model for the client with a forecast to determine what estate tax liability (if any) the client's estate might have between now and some point in the future.  (Some clients want this analysis run to age 90 or 100, other clients want it run all the way out to age 120.)  If there appears to be a future tax risk to the client, Blue Star develops a number of alternative solutions to solve the tax problem (which may or may not involve the use of life insurance).
4. Don then schedules a second follow-up call with the attorney to discuss the alternative solutions.  The attorney then determines if any of these options should be presented to the client.
5. If appropriate as determined by the estate planning attorney, Don and the attorney then have a follow-up call with the client.  On this call is the client, the estate planning attorney, Don and possibly the client's CPA and/or one of Don's tax specialists.  If the client approves any of the solutions, then Blue Star works with the client to apply for life insurance (if applicable) and the estate planning attorney starts drafting the necessary legal documents (grantor trusts, family foundations, etc.). 
6. The client is only responsible for paying for time billed by their own advisors.  This includes the client's existing estate planning attorney (and possibly the client's CPA).  In about 50% of new estate planning cases, new life insurance is recommended as part of the overall plan recommendation.  The reason for this is that life insurance is an effective and straightforward tool for creating estate liquidity without causing additional income or estate tax liability.  This liquidity gives the estate flexibility, control and leverage in a myriad of important areas including funding taxes, covering administrative expenses, allowing more time for the orderly sale of business, private equity or real estate assets, equalizing estates between children that may work in the family business and those that don't, etc. etc.  In any case, if new life insurance is purchased then Blue Star is paid by the insurance company.  Blue Star does not charge consulting fees to the client.
7. In about half the client cases, Blue Star recommends to advisors and their clients that they should NOT purchase life insurance.  This is due to the fact that in some client circumstances, life insurance is unnecessary or there are more cost effective ways to solve a particular planning problem.  We advise clients this way because it’s the right thing to do and also because our guiding principle is to do everything in our power to earn your trust as your expert, unbiased source for life insurance information.
8. Blue Star can also review any existing life insurance policies owned by the client to make sure they are continuing to provide the best possible results (often not the case).  To help us with this policy review assessment, Blue Star has a close relationship with Veralytic, an independent life insurance research company.  The way this works is that the client provides us with some basic information about their policy.  Then, Blue Star pays for a customized Veralytic report which compares their existing policy to every other life insurance product currently available in the marketplace.  Importantly, this report summarizes results with a 5 star rating system showing how the policy compares to other products in each of the following categories:

A.    Financial strength of the insurance company

B.    Competitiveness of policy costs

C.    Stability of pricing offers based on historical behavior

D.    Accessibility to cash values (i.e. restrictions on distributions, surrender charges, etc.)

E.    Actual historical performance

We can then replace any existing policy with better products if (a) the policy is underperforming or not meeting the client’s current needs and (b) the client is still medically insurable.

Contact Us at Blue Star for more information