Working Wealthy – The Estate

July 23, 2019

One of the foundations of personal financial planning is estate planning. For some, it can be an unpleasant topic. Just ask my wife—she put up with my nagging and cajoling for nearly six months before we put our plan in place. I can’t blame her, pondering one’s own mortality is not an everyday task.

In fact, establishing and executing an estate plan is probably the one planning element that clients procrastinate on the longest.

It is simply human nature to want to live in the now and not think about life after we’re gone. Some might even say, “what does it matter what happens after I’m not here?”.

Here are a few ideas and thoughts to help you along with your estate plan.

Something is Better than Nothing

Give yourself some credit for starting the process. Although we would typically see our clients establish wills, powers of attorney (healthcare and property) and perhaps even revocable living trusts, even having one of these documents will help you avoid issues.

Creating a Will: The old saying goes that if you don’t have an estate plan, the state will have a plan for you. Just the existence of a will allows your family and loved ones to follow an orderly and defined process for settling your estate.

Probate: Each state determines how someone’s assets will pass to their survivors upon their passing if they leave no will or trust to dictate the process. This is called probate or the probate process. Essentially, if you leave no instructions, the state you live in will determine how your estate should be handled.

For some, probate might not be a concern. And in many states, there are small estate or minimum estate standards by which someone can settle an estate by simply filing a form and providing notification to the right entities. You will need to know the specific rules for the state you live in to qualify for this process.

Nothing is Written in Stone While You’re Alive

I’ve heard many friends and clients hesitate to establish an estate plan because they feel it needs to be perfect and they just aren’t sure they have the right people or charities included in their plan.

While we would want everyone’s estate plan to be accurate and up-to-date, it’s important to realize that even the most elaborate estate plans can likely be altered, amended or altogether revoked during the lifetime of the person that set it up.

Revocable Trust: Take for example a revocable living trust. I can set-up a trust like this for myself (the grantor) by establishing a legal document which I sign after my attorney has walked me through the set-up and formation of the trust. What’s worth mentioning is that this trust is not permanent during my lifetime.

Just like the name suggests, this living trust is revocable and can be changed while I’m alive. In fact, I can alter and restate that trust endlessly during my life should I so choose. Doing this, you’ll probably end up being your attorney’s best client, but you may also feel more secure knowing any decision or aspect of your trust can be updated whenever you choose.

Use an expert

Typically, the best attorneys for estate planning are those that specialize in trust and estate law. Think of it a bit like going to the doctor. Your internist might be great for 75% of all the ailments you bring to her but is she the best person to remedy a cardiac issue? Probably not—you’d likely enlist a cardiologist for something like this.

Think of that cardiologist like an estate planning attorney. Understanding your specific estate health, the laws for your state of residence and the Federal laws that might impact you is best left to someone who deals with topics like this day in and day out.

If you’ve dragged your feet on establishing your estate plan, you’re in good company. A lot of folks are in the same boat.

We’d encourage anyone to take control of their estate plan by putting even the most simple plan in place, realizing that it’s alterable and that speaking with an expert might make the process that much easier and more effective.

Nick Cosky, CFP® is a Wealth Manager and Owner at BDF and is responsible for educating and introducing prospective clients that are considering hiring BDF for their wealth management needs. In previous roles, Nick has served as the head of BDF’s Financial Planning Committee and has participated on the Business Owner Team and Women’s Service Team. Nick is passionate about the planning that BDF does for its clients and enjoys every aspect of the client-advisor relationship. Nick graduated from Lawrence University in Appleton, Wisconsin, with a Bachelor of Arts degree in History and English. He is a CFP® professional and is a member of the Auxiliary Board at the Art Institute of Chicago.