Communicate To Simplify Your Estate
We work with people in all stages of life. Our oldest clients are in their 90s and our youngest just born (OK, it is really their parents that are clients). Every year it seems like we help someone who has been appointed administrator of an estate or we meet a new family member when a client passes away.
During the financial planning process we always ask our clients if they have a will or trust and we check to see the last time they reviewed their estate documents. We need to do this for several reasons:
- Beneficiary designations on life insurance, retirement plans and any annuities need to be updated if there are changes to the estate plan.
- Families with old estate documents most likely do not have medical powers of attorney, HIPAA compliant updates and other powers of attorney that could be needed.
- Changes in life might require changes in gifting and charitable strategies that should be addressed in the will or trust and might trigger a change in how we manage assets or use life insurance.
The conversations we have with clients about estate planning helps us understand the important matters in each of our clients’ lives. Planning at Cascade is not a simple transaction – it is an on-going relationship. The purpose of your investments and assets help guide us in making investment decisions.
The estate plan spells out the important people and organizations that you designate as your legacy. You get to name the children, charities, religious groups and schools that impacted and shaped your life. Legacy gifts can send grandchildren to private schools and colleges, support important causes and create lasting memories.
Too often, the wonderful gifts left behind get lost in the administration of an estate.
Many people do not tell their heirs where they have accounts and who will be given assets (or not) as an inheritance. There are many reasons for this. Some families just do not talk about money. Others do not want money to become the main reason for discussion and avoid the topic. Some people have money in so many places they forget what they have. Others use different banks and firms in the belief they have additional asset protection (even though it is often not the case). Sometimes, people do not want to hurt feelings of their children or siblings if the estate is split other than equally, so they leave the surprise until after they are gone.
So often, we see estates that are difficult for family members to handle. They have to focus on complex administrative tasks rather than taking the time to mourn and be with family.
Take the following steps to make sure your estate plan is up to date and to be ready to handle the estate of a loved one.
- Meet with your attorney, CPA and us at the same time. There are tax, legal and investment issues in putting together and reviewing your estate plan. Get each person in the same room (or on the phone) together.
- Keep a record of your assets and liabilities in one, easy to find, place. We put together a balance sheet for our clients showing their assets and liabilities. We update this each year during the formal reviews. This one piece of paper can make life easier for your family during the estate administration process. Even better, put together a binder or folder with a copy of a statement for each account or debt. Update this at least once per year. We can help you put this together too.
- Communicate. Let the person you appointed to handle your estate know you did this. Do not keep this a secret. You do not have to give that person every detail of your will and assets – just make sure he or she is willing and prepared.
- Communicate more. Let people know if you plan to exclude them from the estate. Hurt feelings lead to lawsuits and it is better to take care of it in advance. Otherwise, the rest of your heirs could wind up spending inheritances on attorney’s fees rather than to live a more productive and enjoyable life.
- Consolidate accounts. The trend for people during retirement is to bring their assets to one investment firm like ours. This helps as we seek to generate the right amount of retirement income. It helps even more when someone passes away. You do not want the estate administrator to have to contact 12 different banks, creditors and investment firms. Each one has its own rules to get money sent out. Simplify.
- Update account titles. Account titles matter – it shows the legal owner of each asset. Many people put trusts in place as they age but forget to change the title of each asset to the trust. Joint accounts have different rules for distribution and access depending on what type of account. Sometimes, people have made gifts by mistake by including a family member on an account.
Our team at Cascade has significant experience working with families who have lost a member and who are planning for the future. We enjoy sitting with your attorney and CPA to come up with the best strategies that work for you. Take some time at our next meeting to discuss these strategies so we can develop a plan that helps your family today and in the future.
Rob Wrubel CFP®, AIF®,is a Senior Vice President, Investments with Cascade Investment Group, member FINRA & SIPC. Cascade Investment Group is not a tax or legal advisor. You should always consult with your tax advisor or attorney before taking any actions that may have tax consequences.