Sunday, June 9, 2013

The "A" Team

Back again with more thoughts on Estate Planning after completing your divorce.  Over the past few weeks, we’ve talked about some of the reasons to have an Estate Plan, such as surviving a divorce, having saved some money out of the divorce and having children and/or family to provide for.  We’ve also talked about some of the basic Estate Planning documents to have, review, revise or create.  Before we get into some of the serious money discussions over the net few weeks, I wanted to talk about the "A" Team.  That is, your trusted team of Estate Planning Advisors.

Obviously, the first person in your Estate Planning Team of Advisors is ME!  Seriously, you need a competent attorney to help you organize your information and your thoughts, who will help you develop the umbrella concept and create the proper documents under which your Estate Plan exists.  After we define the scope of your assets and debts, the list of your beneficiaries, and your general intent, you will need to bring onto your team, a number of other specialists, in nor particular order.

I would normally suggest that the next person you bring on board, is a tax advisor, who is usually a Certified Public Accountant.  With mastering the nuance between gift tax, estate tax and a variety of related concerns, this person should be able to counsel us all, with your giving goals in mind, as to how to best allocate your Estate.  That would be dovetailed back to your Estate Planning Attorney.

Once we have your road map in mind, with the oh so important tax planning incorporated, next we move on to your Financial Advisor.  Whether you have a nice little nest egg or boat loads of money, you should have at least one Financial Advisor, who will help you invest this money to attain your long-term goals.  Frequently, your Financial Advisor works with any of the major investment firms around the globe.  Sometimes, this may be more of a Banker or Insurance specialist, which I will get to in a minute.  After sharing the core of your desires as set forth in your Estate Planning concept, a good Financial Advisor will work with you determine your relative level of risk, direct you to various types of investments, considering your goals and risks, as well as the composition of your entire investment portfolio, and give you recommendations and implement your investing accordingly.  That would be dovetailed back to your Estate Planning Attorney and possibly your Tax Advisor if you want additional feedback from all trusted sources.

While your Financial Advisor will take your liquid or cash investments and develop and implement a balance portfolio, in the broader scheme of your Estate Plan, that balance could include other assets.  Most people, through employment or choice over time, have some form of life insurance, so the next person to draft onto the team might be your Insurance Specialist.   Like any other investment, your life insurance should be reviewed over time, to determine if it meets your needs, if it is the right format for you, such as Term, Whole Life, Universal Life or some other format.  Frequently, your insurance investment might have an Annuity or some other cash flow investment.  This begins to overlap with tools used by your Financial Advisor, so this is a clear example why you take the complete asset list developed and compiled first with your Attorney, and share this with your Financial Advisor and Insurance Specialist, so that you do not accidentally have too much of any particular type of investment and risk losing special tax treatment or over expose your total portfolio to any particular market problem.  This is also where you may begin to feel a bit of a tug to place more money with one type of investment or another, but your team should be able to professionally work and play well with others.  If there is trouble in your paradise, you can always change your team.  It is your life, your money and you are the boss.  Again, once you have your insurance items in place, many of which can have serious tax implications and positive effects on your Estate Plan, that would be dovetailed back to your Estate Planning Attorney and possibly your Tax Advisor if you want additional feedback from all trusted sources.

In California, the two biggest value items in many people’s Estates, except for those hi-tech stock option types, is typically the funded retirement account or their home.  If you have real estate, whether it be a residence alone, a vacation property, or investment properties, your team is further fleshed out by any or all of the Real Estate Specialists, including Property Managers, Mortgage Brokers and trusted Realtors.  With the interest rates as we have today, being historically very low, refinancing properties to reduce payments and affect cash flow, refinancing to shorten loan life and get quicker pay off during high earning years, are but a few reasons to have these folk on your speed dial.  Selling to downsize in later life or when the nest empties, is a common issue for Baby Boomers.  Considering profit taking and tax sheltered trades.  If you have real estate, you have many options and considerations.  Your Real Estate Specialists can have a huge impact on growing and preserving wealth.  I would comment here that you want to have the number of a good Business and Real Estate Attorney to help on some formalities and in order to avoid serious pitfalls.  Again, this would be dovetailed back to your Estate Planning Attorney, possibly your Tax Advisor, and now also your Financial Advisor and Insurance Specialist, not only for additional feedback from all trusted sources, but also for the related services they can provide.
Last, but certainly not least, I would recommend have a good relationship with a Personal Banker at a reputable banking institution.  You will need a variety of possible bank accounts, savings accounts, checking accounts, even a safe deposit box and other services that your Personal Banker has to offer.  I also suggest that you consider having accounts in the name of your Trust, which I will talk about in another blog, but also your personal names.  Furthermore, your Personal Banker may also be able to offer a full deck of services, such as Financial Advising investments, Mortgage services and Credit functions.  I cannot express how important it can be, in this day of online banking and ATM transactions, and how nice it can be to know a real person as the face of a massive financial institution to back you up.  And finally, this would be dovetailed back to your Estate Planning Attorney, and possibly the balance of you're A Team not only for additional feedback from all trusted sources, but also for the related services they can provide.

Sorry for being longer than the average blog, but as this is good stuff, I wanted to share a big picture with you.  In the days that follow, I will give you more reasons to create, review and revise your Estate Plan. However, if you are interested in learning more about an Estate Plan, Wills, Trusts, Advanced Healthcare Directives, or Divorce, Custody, Visitation, Child Support, Spousal Support, Property Division, Modifications, Remarriage, or Pre-Nuptial Agreements, and you live in Santa Clara County or thereabout, please contact me at, or at for Fred Begun.