2 Estate Planning Secrets

Estate planning is the process of determining where financial assets will go after someone passes.  Family coordinators of care see the issues behind this process up front.  They find themselves in conversations with their loved ones about plans for a vacation home after death, left over retirement assets and who gets the family jewelry.

While it sounds like a legal headache it’s worth looking into estate planning in advance.  If you don’t the government could take 50% or more of your loved one’s assets.  The last thing you want after your loved one worked so hard to earn their income is to turn it over to Uncle Sam when they pass.

This post will outline 2 secrets to estate planning that you can start today.  These secrets will put you far ahead of the curve.  You will know that your loved one has the options to plan now far in advance of needing it.  Uncertainty will be replaced with clarity.

How To Begin

Speaking with loved ones about financial matters can be challenging.  However speaking up is better than staying quiet, even if it’s uncomfortable.  As you play a larger role in their financial life these conversations are important.

The best way to begin is to ask their advice.  For example, “Mom, we have been thinking about our own financial planning now that we have kids and it’s been a bit challenging to set up a will and get things in place.  How did you and Dad approach it?  What did you learn?”

See if they have a financial planner or lawyer they work with already.  See what steps they have taken.  Do they have a will or irrevocable trust?  How about beneficiaries for their retirement accounts?  Have they thought about what they would like to do with their funds after they pass?

You don’t need to press them on specific topics.  Just listen.  The discussion will likely unfold over several meetings.  Don’t be afraid to table topics that are too thorny.  There will be time to discuss them later.  If the situation is more immediate however be direct and loving.

Once you understand where they are with estate planning review the below secrets to take things to the next level.  Many are missed by some of the highest earning families.  Take the time now and it will pay significant dividends down the road.

1. Find An Expert

There are many steps your family can take to transfer assets to the next generation today.  However estate planning is a field that requires significant expertise in technical fields like tax and law.  It’s worth your time to find an expert to help your family through this process.

If your loved one already has a lawyer or accountant make sure they have expertise in estate law.  If not, bring in an estate lawyer to partner with them.

Confirm that your loved one’s estate will have assets to transfer first.  If their estate will be worth less than $25,000 to $50,000 they may qualify for a simplified process (called simplified probate) and will not need an estate lawyer.

Search here for an estate planning lawyer in your area.  Also check with friends and family for recommendations on someone they have worked with in the past.  This may help you find a trustworthy individual or at the very least inform you more on what you are looking for.

Similar to when you search for at home care assistance, interview two to three estate planning candidates before making a decision.  Find someone who is a good technical and personality fit for your family.

2. Set Up Power of Attorney

The most challenging situation many families face when a family member gets unexpectedly sick is that no one is the individual’s power of attorney.  This means that medical and financial decisions cannot be made if the loved one is incapacitated.

If you only had the time to do one thing this is it.

There are two primary types of legal power of attorney, one for financial and one for medical.  Both transfer the decision making power in specific circumstances to a loved one or friend.

Read more here for a detailed step by step action plan.  The basic components are:

  • Review the actions you will be able to take (5 min)
  • Identify the legal power of attorney (30 min)
  • Review that the contract can always be reversed (15 min)
  • Distribute the form to financial institutions (2 hours)

If you like this post and want to hear more please sign up for our email list!

Published: October 15, 2015
By: JP Adams

Subscribe Here! Enter your email and get updates. It's free!

Leave a Reply

Your email address will not be published. Required fields are marked *