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 http://www.fcbegun.com/, fbegun@gmail.com or at http://www.linkedin.com for Fred Begun.
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