How To Set Up An Estate Plan

Georgina Tzanetos   Tue, October 26, 2021, 10:07 AM·7 min read

Thinking about estate plans usually evokes an image of a wealthy family summoning their family lawyer to make sure their summer homes pass through to the children while evading taxes. Modern estate planning though is much more about organizing your financial assets to make sure they are protected from new problems, such as outside business ventures or a potential divorce — or even a pandemic. According to a new survey from Edward Jones, a third of Americans say the pandemic has triggered conversations with their family about end-of-life plans.

An estate plan is a contract that is put in place to disperse and dispose of a person’s assets upon their death or selected time of transfer for the assets. This can include wills, trusts, powers of attorney, probates and more. It is up to the individual who created the estate plan to determine who the beneficiaries of their estate will be.

Earl Rubinoff of The Rubinoff Group says to focus on these two important points:

The name of the person you want to take care of and be the guardian of your children.

The name of the person you want to take care of your money. This is essential since you want to appoint a trustee that you can trust and who you think has sound judgment. In addition, you need to name a competent successor trustee, in case your initial trustee is disappointing, gets ill, resigns, or dies.”

An important rule of thumb before walking into an estate planning meeting is to never sit at a table where there is not BOTH a licensed financial advisor and estate planning attorney present. Each of these professionals has a different specialty which is crucial in making an appropriate plan.

A financial advisor or CFP can ensure your assets are put into accounts that are easily transferable to your beneficiaries — or not, depending on what your goals are. For example, let’s say you prefer to liquidate your annuities while you are alive versus transferring them to your children. A financial advisor would then construct the distributions to be both immediate and liquid, going directly into bonds or other low-risk investments and increasing the amount of the distribution.

Had an annuity been set up as they usually are, investments might be put into target funds to last the duration of both your life and then perhaps for some years thereafter. The important thing here is that a target fund with even a 10-year horizon is invested far differently than a fund whose goal is to liquidate in the next 2-3 years.

Michael Fischer, director and wealth advisor at Round Table Wealth Management says if you currently are working with a financial advisor, they should be able to give you a basic understanding of what the role of a will or trust would have in your estate plan.

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