Who Needs an Estate Plan?
Jeff Martin is a financial advisor at Cornerstone based in Reno, NV. Jeff has earned the Life and Health Insurance Licensure and has passed the Series 65 examination. He enjoys being able to help clients create customized strategies for their portfolios based on their unique financial goals.
WHO NEEDS AN ESTATE PLAN?
Who needs an estate plan? Only those who anticipate passing away at some point in time. I do not mean to come across as flippant, but this does in fact, apply to everyone. You have heard me share time and time again that each situation is unique in its own right, and that remains true here as well. While all situations are different, one commonality persists as it relates to this topic: we do not live forever. As such, what happens financially prior to and after you pass should be a conversation you have in detail with your advisor.
IS AN ESTATE PLAN THE SAME AS A TRUST?
Often when estate planning comes up, we think that it is synonymous with a Trust. Which in many cases it can be, but not always. First, the disclaimer, I am not, nor claim to be an attorney. That being said, in my experience in working with attorneys and client’s attorneys, a Trust is not always needed pending the situation, assets, goals, and objectives, but a plan is.
A general rule of thumb is that if you own property (ie. a home), and want your heirs to avoid probate, establishing a Trust will do just that. Many times, this is reason enough to meet with an attorney and go through the process of establishing a Trust.
WHAT SHOULD AND SHOULD NOT BE PUT IN A TRUST?
Pending the type of assets one has will play a role in the appropriate course of action. For instance, there are assets generally encouraged to have held in a Trust, and other assets that you would not want to unless it is an extremely rare situation. I am referring to retirement accounts here. Retirement accounts almost always should not be held in a Trust and will still avoid probate so long as the beneficiary designation has been made for the accounts. Examples of assets you would generally want to hold in a Trust would be real property (primary residence, rentals, etc), non-retirement investment accounts, bank accounts, vehicles, etc. This would avoid the lengthy, frustrating and expensive experience of going through probate.
WHAT DOES A POWER OF ATTORNEY DO?
While passing assets efficiently and as intended is a huge driver behind estate planning. There are a couple of other components that are worth mentioning, ie. Power of Attorneys (POAs). Life has a knack for delivering unexpected surprises, both good and bad. These documents can help appease the latter. These documents allow an individual to name another trusted individual to make both medical and financial decisions on their behalf should they become incapacitated. In my opinion, it would be an extremely rare exception (as in almost never) that an individual should not have these documents in place. I have unfortunately seen more times than I would like both personally and professionally, the importance of these documents in tough situations. POAs are like fire extinguishers in that when you need them, you had better have them ready to go.
WHERE TO GO FROM HERE
So, unless you accompanied Indiana Jones and drank from the holy grail in turn achieving immortality, I highly recommend you have discussions with your advisor and attorney to ensure you have your documents in place to execute your wishes. Our advisors at Cornerstone know that estate planning is a vital piece of the retirement puzzle. We take a comprehensive approach to make sure our clients live out their dream retirement. To see what your plan would look like, call our office at 775.853.9033.
Based in Reno, NV, Cornerstone is for individuals and families looking to grow wealth, protect and preserve their life savings, and plan for the distribution of their estate in a tax-efficient manner through a tailored strategy. Schedule a time to discuss your financial goals with us.
This information does not constitute legal or tax advice. PCIA and its associates do not provide legal or tax advice. Individuals should consult with an attorney or professional specializing in the fields of legal, tax, or accounting regarding the applicability of this information for their situations.