Estate planning is an important component of your financial plan, to ensure that your intentions for your wealth are carried out exactly how you wish. Utilizing your wealth advisor as a resource to help you plan ahead can alleviate any unnecessary stress on your beneficiaries and offer clarity on how to handle your estate should you become incapacitated or pass away.
Your wealth advisor plays a key role in helping you develop your unique estate plan and will work collaboratively with your estate planning attorney to make this process as seamless as possible. While there is nothing “common” about an individual’s estate plan, there are some common misconceptions about how people think about estate plans in general including:
- Estate planning isn’t one size fits all. Creating an estate plan is a very personal process. Beyond your property and assets, it also takes into account beneficiary designations, guardianship (if applicable), Advanced Healthcare Directives (AHCD), and powers of attorney. At the heart of your plan are your express wishes for how you’d like your estate to be managed.
- Estate plans go beyond wills and trusts. When some people think of an estate plan, they think of a will or other legal documents. While that is true, estate plans address all aspects of your wealth and outline a process for your beneficiaries and other designated professionals to follow.
- It’s not a one-and-done process. While it may seem like you’re checking off a very important box in your financial plan, an estate plan needs to evolve along with you. Life changes and surprises make it necessary to review your estate plan on a regular basis.
- It’s not official until it’s official. Writing down your thoughts on paper and putting them in a safety deposit box is not considered a legitimate estate plan. Nor is anything informal or verbally agreed upon with your intended beneficiaries. Your documents must be signed, dated, & notarized before they can be considered “ready.”
- You should choose an attorney specializing in this field. You may already have a family attorney for other matters, but when it comes to estate planning, it’s important to select one with experience in this area. You wouldn’t go to a neurologist if you need heart surgery!
- It’s not just for the 1%. The design and creation of a living trust have more to do with your wishes surrounding your money than it does with your wealth. Living trusts, for example, direct your wealth as you wish but aren’t based on the amount you have.
- Choosing a beneficiary (or a caregiver) isn’t always obvious. Often, it seems clear who you would choose as the beneficiary of your wealth. Similarly, it may be obvious that your minor children (if applicable) should go to certain family members in the event of your passing. These are not decisions that should be made quickly, and we recommend that you work through this with your advisor.
- Completing documents is just the first phase of your estate plan. Completing your documents is step one. Step two requires the completion of retitling, funding, and re-organizing the beneficiaries of your assets accordingly. The attorney who completed your plan and your wealth advisor will assist you with this. A very common misconception for families is that the plan is complete as soon as the ink hits the paper. There is still work to be done to tie it all together!
According to a 2020 study by Caring.com, 59% of people surveyed believed that having an estate plan should be a priority, but 32% of those same participants actually had an estate planning document. One of the issues, we believe, comes down to time and priorities. It’s also not an easy project to undertake, as you’ll be addressing issues that may be sensitive or complex.
Many of the people we have spoken to who do not have an estate plan in place often don’t know where to start or what questions to ask. We believe there are three important questions to ask yourself when it comes to your estate plan.
- When did we last review my estate plan? At a minimum, your estate plan should be reviewed every 10 years or so. There are some attorneys who note it should be reviewed every birthday.
- Have I experienced any life events that might impact my estate plan? As you experience life changes (a divorce, a death, a new child, new home purchases, etc.) you’ll want to review your plan accordingly. Keep in mind that the changes that you make to your estate plan will likely have a financial impact.
- Are my beneficiary designations up to date? With time and with life changes, you may also change your approach to who you designate as your beneficiaries.
The advisors at BerganKDV Wealth Management bring deep experience partnering with clients and their estate planning attorneys on creating and monitoring their estate plan. They take a multi-step approach beginning with a conversation about the client’s wishes, and if a plan is already in place, how they feel about their current plan. From there, the client signs a consent form that enables the advisor to share documents and their financial plan with their attorney. Lastly, the advisor meets with the client and the attorney to discuss the plan. Our goal is to take the client and their estate plan through 99% of the journey, with the attorney putting the finishing touches on the estate plan to make everything official.
The wealth advisors at BerganKDV can help you create and structure your estate plan. Want to learn more about what we can do for you? Let’s have a conversation.
The views and strategies described may not be suitable for all investors. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for accounting, legal or tax advice. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.
The views expressed are those of BerganKDV Wealth Management. They are subject to change at any time. These views do not necessarily reflect the opinions of any other firm. Investment advisory services and fee-based planning offered through BerganKDV Wealth Management, an SEC Registered Investment Advisor.
