CFP Retirement and Estate Planner Raleigh

Before Your Meeting with an Estate Attorney…Ask Yourself

In Asset Allocation, Estate Planning, General Financial Planning, Personal Finance, Personal Financial Planning, Retirement Planning by Chip Hymiller

Congratulations – you’ve finally stopped procrastinating and have decided to meet with an estate planning attorney.  Of course, no one likes to think about dying, but being prepared could be very beneficial to your family and provide you with a certain peace of mind.  Overall, the estate planning process is a pretty easy item to check off your financial planning to do list!

In order to make your meeting with the estate planning attorney more efficient and productive, here are few items that you need to think about or decide on.

What should be the basic terms of your will?

A will is simply a legal document which provides for the distribution of property at your death.  It is important to recognize that not all assets are distributed to beneficiaries via the will.  Life insurance, IRAs, 401k plans and Payment on Death accounts (POD) generally have beneficiary designations that supersede the terms of a person’s will.  A will generally provides for the disposition of most personal belongings.

Who will be the executor and successor executor of your estate?

The executor’s role is simply to route your money and other assets to those individuals whom you designate in your will.  The executor position is temporary and generally lasts less than a year.  Most executors are given the authority to hire other professionals like attorneys, CPAs or financial advisors who can assist the executor with the estate settlement process.  When deciding on the role of executor, it is important to identify both a primary and a successor executor (the primary’s backup).

Who will be the guardian and successor guardian for your children?CFP Retirement and Estate Planner Raleigh

The guardian is the person/people who would take care of your child/children in the event you were to pass away. For parents with young children, there has never been a more important decision.  Of course, it is important to confirm with the individuals you are naming that they are willing and feel comfortable with this responsibility.  It is important to note that if a parent does not assign a guardian for their children, the courts will appoint one.

Is it appropriate to incorporate trust provisions for the benefit of your children into your estate planning?

Do you really want your young children to directly inherit your assets?  Probably not!  Most people would prefer utilizing a trust for the benefit of your children.  Especially when you consider the total amount of life insurance proceeds, retirement plans, real estate and personal assets.  For most, it would be better to route these assets through a trust that is established for the benefit of your children.

What should the terms of the trust be?  How old should the children be when they receive the money held in trust?  Should it be staggered (i.e. half at age 25 and half at age 30, etc.)?  What types of expenses should trust assets cover or not cover?

Who should be the trustee and successor trustee of this trust?  The trustee is the person who is responsible for managing and distributing the money from the trust.  This person will have the ability to hire other professionals (attorneys, advisors, etc.), but should be able to make sound financial decisions.  The trustee and the guardian can be the same person, but they do not have to be the same person.

Is there a need for other types of trusts?

There are a number of situations that would warrant the use of other types of trusts in your estate planning.  The need for asset protection, tax minimization, incapacitation and other eldercare issues are all concerns that could be managed through the use of trusts.  In addition, those with non-traditional families and those in second marriages may want to consider utilizing a trusts for the efficient distribution of assets.

Do you need powers of attorney?

The answer to this question is YES.  Each individual needs both durable power of attorney (DPOA) and healthcare power of attorney (HPOA) documents.

Durable Power of Attorney.  A durable power of attorney assigns authority to an individual to make financial decisions on your behalf.  This could mean signing your name, opening accounts and engaging in other financial transactions in the event you are unable to do so.

Health Care Power of Attorney.  A health care power of attorney assigns the authority to allow someone to make health-related decisions on your behalf.

Prior to meeting with an estate planning attorney, you should consider those individuals most qualified to make both financial and health-related decisions on your behalf.

Do you  recommend advance health care directives (also known as a living will)?

Yes.  Advance health care directives provide guidance of your wishes regarding treatment options and other life-prolonging measures that could be taken on your behalf.  Formally providing your wishes on these matters will provide peace of mind to those in your family who are responsible for making these difficult end-of-life decisions should they arise.

If you should have any questions or need a referral for a qualified estate planning attorney, please feel free to give us a call.