Considerations of Estate Planning

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When thinking about Estate Planning, the first thing that comes to mind for most people is creating a will.

While this is an important part of the Estate Planning process, there are many other components to consider as well, such as the naming of beneficiaries, designating a power of attorney, drafting medical directives, insurance planning, tax planning, and so on. It is important to consider all of these factors when creating your estate plan, in order to ensure your assets are protected and distributed in the manner you intend.

To create an effective Estate Plan, the first step is to identify your objectives. Some examples of questions to consider are:

  • How do you want your assets distributed upon your death?
  • If you have minor children, who do you want to become their guardian(s)?
  • Who do you want to name as executor to settle your estate?
  • Who do you want to act on your behalf, if you become unable to make decisions?
  • If you own a business, what is your succession plan?
  • If you hold significant real estate assets, what is your plan for disposition of these holdings?
  • Do you want to leave a portion of your estate to charity?

Once you have determined your main objectives, an Estate Planning attorney can assist you with drafting the necessary documents to put your plan into action. These documents may include, but are not limited to:

Will – This is the document in which you describe how you would like your personal property to be distributed and to whom. You can also use this document to name your executor, who is the person named to settle your estate by handling the distribution of your property and final payments of debts and administrative fees.

Medical Directive – Also known as an Advanced Healthcare Directive or Healthcare Proxy, this document legally appoints another person to make decisions regarding your healthcare, in the event you become unable to do so yourself. You can specify within the document what actions should or should not be taken on your behalf.

Durable Power of Attorney – This document legally appoints another person to take on certain legal, financial and medical responsibilities, should you become incapacitated.

Trusts – A trust is a legal entity created to hold assets for the benefit of a third party, and is managed by one or more trustees. Many types of trusts exist, with different intents. Talking to an experienced professional can help you to determine what type of trust might be most beneficial for you and your family.

LLC Documents for Real Estate or Business Interests – If you own a business or real estate assets held in a LLC, those documents should be reviewed to ensure there will not be any unintended distributions of assets that are counter to your wishes noted in your trust or will.

It is important to keep in mind that good Estate Planning can include the transfer of assets prior to your death, by use of gifting strategies, trusts, and insurance. For example, retitling assets into the name of trusts or life insurance policies can be an excellent tool for reducing your potential estate tax liability, thereby leaving more of your assets available for distribution according to your desires.

Your Freestone Client Advisor can assist you in reviewing your asset titling and the beneficiary designations on your retirement accounts and insurance policies, to ensure they are in line with your objectives.

Following the initial discussion and review of your needs, your Freestone Client Advisor can work with your existing attorney, or can refer you to an Estate Planning attorney, to draft the necessary documents and proceed with an in-depth plan, customized to you and your needs.

Important Disclosures: Nothing in this document is intended to provide, and you should not rely upon it for, accounting, legal, tax, healthcare or investment advice or recommendations. We are not making any specific recommendations regarding any investment or estate planning strategy, and you should not make any investment or estate planning decisions based on the information in this document. The intention of this document is educational and it is intended only to discuss a few limited aspects of estate planning. This document is not a comprehensive or complete summary of considerations regarding estate planning strategies. Each individual is in a different situation and has different items to address, and the options in this document are not appropriate for everyone. Please consult your Freestone client advisor and a professional estate planning advisor regarding options specific to your needs.

Posted By: Stephanie d'Ippolito, CFP®

Stephanie d’Ippolito, CFP®, is our Managing Director of Financial Planning. She is passionate about helping people and believes that financial planning can be a valuable tool for clients to understand and solve their unique financial problems. She lives in Seattle with her husband and two dogs, Toby and Thurman.