An Estate Plan Is a Great Way for Clients to Give Thanks

Your Clients’ Legacies: How Do They Want to Be Remembered? 

As trusted advisors, we often discuss with our clients all aspects of the future, whether it be their financial future, the future support of their loved ones, or what the future will look like when they are no longer a part of it. Epitaph Day is an opportunity to center your discussion on how your clients would like to be remembered. 

As Thomas Campbell, physicist and the author of My Big TOE, once said, “To live in the hearts we leave behind is not to die.” When we lose a loved one, we often have memories of special events and occasions, support they provided us, or specific qualities of that person we will never forget. An epitaph, by definition, is a brief phrase or sentence expressing a sentiment, often inscribed on a tombstone. Epitaph Day is a symbolic event dedicated to the contemplation and creation of our desired epitaphs. It is a gentle and meaningful reminder of the impermanent nature of life and the importance of estate planning. 

An Estate Plan Can Help Them Be Remembered

In the rush and routine of daily life, it can be easy to postpone essential matters like estate planning. Although Epitaph Day has recently passed, now is a great opportunity for clients to pause and consider the importance of ensuring that their wishes, the things they own, and their legacies are handled according to their preferences after their departure from this world. Your clients may be surprised to learn more about the ways that they can incorporate their own desired epitaph into the planning process. 

A Trust Can Help Your Clients Guide Their Loved Ones

While it is true that a trust is a valuable estate planning tool, it is much more than that. A trust can memorialize your client’s values and aspirations for their loved ones. By incorporating provisions that incentivize beneficiaries to pursue an education, hone a new craft, contribute to the community through volunteering, or even embark on entrepreneurial ventures, your clients can craft a legacy of encouragement, motivation, and support. Their trust can become a continuation of their presence, guiding their beneficiaries in ways that align with their wishes and vision for their future.

A Trust Keeps Your Client Part of Memorable Experiences 

For those clients who cherish experiences and the creation of lasting memories, it can be invaluable to incorporate clauses within their trust that allocate money specifically for ventures like traveling, exploring new places, or even family reunions and celebrations of important events. These provisions not only facilitate experiences but also foster a deeper connection, ensuring that their family bonds remain strong even in their absence.

A Trust Can Provide Monetary Support 

An estate plan is a powerful tool that can reflect your clients’ dedication and commitment to the well-being and success of their loved ones. For those who have provided financial support to loved ones in their lifetime, their estate plan offers them an opportunity to define and detail the nature and extent of their continued monetary support. Through meticulous planning, they can be remembered not just for the wealth they have accumulated but also for the love, care, and foresight indicated by the provisions incorporated in their plan. 

Now Is the Perfect Time for Clients to Start Planning

Epitaph Day creates an opportunity for clients to proactively engage in the estate planning process and provide them with both peace of mind as well as clarity and ease for their loved ones in the future. This can help ensure that your clients’ desires, whether about distribution of their hard-earned money and property, funeral arrangements, or messages to their loved ones, are clearly articulated and legally secure. 

Let us help your clients embark on the crucial journey of estate planning, ensuring that their legacy is honored and that their loved ones are spared unnecessary difficulties in honoring your clients’ lives and wishes for the future. 

The Real Story Behind Trust Fund Kids 

When we hear the phrase “trust fund kid,” words like “entitled,” “privileged,” and “financially irresponsible” might come to mind. But another word we should associate with “trust fund kid” is “protected.” 

What Is a Trust Fund Kid?

According to a Forbes article published in 2021 about trust fund kids, three of the most common misconceptions are that trust fund kids all come from ridiculously rich families, they have it easy, and everyone who has serious money must have a trust fund. While these misconceptions may apply to some trust fund kids, it does not apply to the majority. The reality is that a trust fund kid does not necessarily live a life filled with lavish trips, designer clothes, and expensive cars— they are simply a young beneficiary of a trust. When most people hear the word “trust,” they envision an endless pot of money freely accessible to the beneficiary. Trusts are created for a variety of reasons, however, and are not just planning tools that benefit the ultrawealthy. 

Why Do Trust Fund Kids Have Such a Bad Reputation? 

This bad reputation stems from a fundamental misunderstanding of trusts and the benefits they can provide. A trust often indicates that an individual has taken the time to intentionally plan for their children’s or loved one’s future, and instead of deciding to leave money to these individuals outright with no protections or conditions, they have decided to protect those funds. Whether the amount held in trust is millions of dollars or far less, trusts can be structured to ensure that the money lasts, is used for specific purposes, or is even held for the future benefit of children or loved ones. Added benefits of utilizing a trust are privacy, as trusts are not filed with courts and therefore are not subject to the public eye, and avoiding the probate process, which in some cases can be costly and time-consuming. 

Preventing the Negative Consequences

Limit Control

After enlightening your clients about the real story behind trust fund kids, they may want to learn more about the positive ways a trust could benefit their own children or loved ones. To avoid the negative stereotypes surrounding trust fund kids, your clients will want to consider how much control they want to give the beneficiary over their own trust. Granting too much control could lead to uncontrolled spending or unreasonable purchases. 

Make a Beneficiary Earn Their Inheritance

Clients may want to avoid the perception that their children or loved ones have it easy and should therefore consider building in provisions that will require their children or loved ones to “earn” portions of their trust. This structure can incentivize their children or loved ones to achieve more by reaching certain milestones such as completing postsecondary education, finishing trade school, serving in the military, or starting a business. Clients can elect to have the trustee purchase certain assets, such as a home, in the name of the trust to ensure that the assets are provided to the beneficiary, while the trustee is responsible for ensuring that it is properly maintained and not sold on a whim. 

Consider Loans Instead of Outright Gifts

You may encounter clients who have worked hard to build their wealth and want to leave protected funds that can benefit their children or loved ones in a different way. There are many wealthy individuals who do not want to leave money to their children or loved ones because they believe it may disincentivize them to pave their own way. As it is, the majority of young adults do not have the ability to obtain financing with favorable terms on their own. For your clients who want to provide a more conservative form of support, they can allow their trust to provide favorable loans to beneficiaries that they will have to pay back with interest, allowing the principal to grow for future generations. 

We Can Help Your Clients Avoid the Downsides of a Trust Fund Kid

Although being a trust fund kid often has negative connotations, your clients will likely want to make their own children or loved ones trust fund kids if they are educated about the positive aspects. We can help further educate your clients about how a trust can benefit them, protect their children or loved ones, and support their children or loved ones in the future. 

This Thanksgiving We Are Thankful for Your Collaboration

It is no secret that having a solid network of quality professionals allows us to address more than just one of our clients’ concerns. It takes a team to plan for life’s foreseen and unforeseen events. Working with quality professionals like you enables us to ensure that our clients are receiving the best possible comprehensive plan and that it is done the right way. 

Our clients can feel secure knowing that all facets of their future are being considered when we collectively strategize the best structures and tools to adequately address their finances, businesses, and tax considerations, all while achieving the end goal of promoting family harmony. 

There Are Many Opportunities for Us to Work Together

Irrevocable Trusts

Irrevocable trusts provide higher-net-worth clients with a variety of benefits, such as avoidance of estate inclusion and reducing future estate taxes. Consequently, clients will likely require assistance addressing the higher income tax liability and understanding any potential tax implications associated with the trust being the owner of the money and property they have worked so hard for. 

Business Succession Planning

We often encounter business owners and entrepreneurs while creating an estate plan. As part of our process, we often implement strategies on the estate planning side to address business succession and management in the event of death or incapacity. Additionally, we discuss clients’ goals of achieving asset protection for their real property, which may involve us advising them to transfer their property to a business entity. While we can address some aspects of business ownership, our clients benefit from the guidance of an experienced professional who can assist them in determining which business entity type may be the most appropriate, and even further, ensuring that they have the proper formation and operational documents in place once it is established. In addition, clients will likely need to be educated about proper management and any filing requirements associated with entity ownership. 

Liquidity for Minor Beneficiaries

Planning for minor children is often at the top of our clients’ priority list. Trusts are often a great tool to create a plan for minor children in the event of a client’s death. This form of planning involves examining a client’s assets and ensuring that there is an available source of liquidity to fund the trust for the benefit of these children. 

We Are Thankful to Have a Go-To Person 

We are thankful to have you as a part of our incredibly valuable network. We appreciate the contributions you make to ensuring that our mutual clients have a comprehensive plan for the future. Our world is constantly changing, prompting clients to have evolving concerns that need to be addressed by knowledgeable professionals. Having knowledgeable professionals like you allows us to be the go-to person when clients call us looking for guidance. Thank you for being a part of our network, and we look forward to continued opportunities to collaborate to better serve our clients. 

Give Thanks This Year with an Up-to-Date Estate Plan

Your Legacy: How Do You Want to Be Remembered? 

As Thomas Campbell, physicist and the author of My Big TOE, once said, “To live in the hearts we leave behind is not to die.” When we lose a loved one, we often have memories of special events and occasions, support they provided us, or specific qualities of that person we will never forget. An epitaph, by definition, is a brief phrase or sentence expressing a sentiment, often inscribed on a tombstone. Epitaph Day is a symbolic event dedicated to the contemplation and creation of our desired epitaphs. It is a gentle and meaningful reminder of the impermanent nature of life and the importance of having a plan for the future.  

An Estate Plan Can Help You Be Remembered

In the rush and routine of daily life, it can be easy to postpone essential matters like estate planning. Although Epitaph Day has recently passed, now is a great opportunity for you to pause and consider the importance of ensuring that your wishes, the things you own, and your legacies are handled according to your preferences after your departure from this world. You may be surprised to learn more about the ways that you can incorporate your own desired epitaph into the planning process. 

A Trust Can Help You Guide Your Loved Ones

While it is true that a trust is a valuable estate planning tool, it is much more than that. A trust can memorialize your values and aspirations for your loved ones. By incorporating provisions that incentivize your beneficiaries to pursue an education, hone a new craft, contribute to the community through volunteering, or even embark on entrepreneurial ventures, you can craft a legacy of encouragement, motivation, and support. Your trust can become a continuation of your presence, guiding your beneficiaries in ways that align with your wishes and vision for their future. 

A Trust Keeps You Part of Memorable Experiences

For those who cherish experiences and the creation of lasting memories, it can be invaluable to incorporate clauses within your trust that allocate money specifically for ventures like traveling, exploring new places, or even family reunions and celebrations of important events. These provisions not only facilitate experiences but also foster a deeper connection, ensuring that your family bonds remain strong even in your absence. 

A Trust Can Provide Monetary Support

Your estate plan is a powerful tool that can reflect your dedication and commitment to the well-being and success of your loved ones. If you have financially supported others in your lifetime, your estate plan offers you an opportunity to define and detail the nature and extent of your continued monetary support. Through meticulous planning, you can be remembered not just for the wealth you have accumulated but also for the love, care, and foresight indicated by your plan. 

Now Is the Perfect Time to Start Planning

Epitaph Day creates an opportunity for you to proactively engage in the estate planning process and provide yourself with both peace of mind as well as clarity and ease for your loved ones in the future. This can help ensure that your desires, whether about asset distribution, funeral arrangements, or messages to your loved ones, are clearly articulated and legally secure. 

Let us help you embark on the crucial journey of estate planning, ensuring that your legacy is honored and that your loved ones are spared unnecessary difficulties in honoring your life and wishes for the future. 

The Real Story Behind Trust Fund Kids 

When we hear the phrase “trust fund kid,” words like “entitled,” “privileged,” and “financially irresponsible” might come to mind. But another word we should associate with “trust fund kid” is “protected.” 

What Is a Trust Fund Kid?

According to a Forbes article published in 2021 about trust fund kids, three of the most common misconceptions are that trust fund kids all come from ridiculously rich families, they have it easy, and everyone who has serious money must have a trust fund. While these misconceptions may apply to some trust fund kids, it does not apply to the majority. The reality is that a trust fund kid does not necessarily live a life filled with lavish trips, designer clothes, and expensive cars—they are simply a young beneficiary of a trust. When most people hear the word “trust,” they envision an endless pot of money freely accessible to the beneficiary. Trusts are created for a variety of reasons, however, and are not just planning tools that benefit the ultrawealthy. 

Why Do Trust Fund Kids Have Such a Bad Reputation? 

This bad reputation stems from a fundamental misunderstanding of trusts and the benefits they can provide. The existence of a trust often indicates that an individual has taken the time to plan for the future of their children or loved ones, and instead of deciding to leave money to these individuals outright with no protections or conditions, they have decided to protect those funds. Whether the amount held in trust is millions of dollars or far less, trusts can be structured to ensure that the money lasts, is used for specific purposes, or even is held for the future benefit of children or loved ones. Added benefits of utilizing a trust are privacy, as trusts are not usually filed with a court and therefore are not subject to the public eye, and avoiding the probate process, which in some cases can be costly and time-consuming. 

Preventing the Negative Consequences

Limit Control

After learning more about the real story behind trust fund kids, you may be curious and want to explore the positive ways a trust could benefit your own children or loved ones. To avoid the negative stereotypes surrounding trust fund kids, you will want to consider how much control you would want them to have over their own trust. Granting too much control could lead to uncontrolled spending or unreasonable purchases. 

Make Your Beneficiary Earn Their Inheritance

You may want to avoid the perception that your children or loved ones have it easy and should therefore consider building in provisions that will require them to “earn” portions of their trust. This structure can incentivize your children or loved ones to achieve more by reaching certain milestones such as completing postsecondary education, finishing trade school, serving in the military, or starting a business. You can elect to have the trustee purchase certain assets, such as a home, in the name of the trust to ensure that the assets are provided to your children or loved ones, while the trustee is responsible for ensuring that they are properly maintained and not sold on a whim. 

Consider Loans Instead of Outright Gifts

You have worked hard to build your wealth and want to leave protected funds that can benefit your children or loved ones in a different way. There are many wealthy individuals who do not want to leave money to their children or loved ones because they believe it may disincentivize them to pave their own way. As it is, the majority of young adults do not have the ability to obtain financing with favorable terms on their own. For those of you who want to provide a more conservative form of support, you can allow your trust to provide favorable loans to your children or grandchildren that they will have to pay back with interest, allowing the principal to grow for future generations. 

We Can Help You Avoid the Downsides of a Trust Fund Kid

Although being a trust fund kid often has negative connotations, by working with an experienced estate planning attorney and exploring the positive aspects, you may want to make your own children or loved ones trust fund kids. We can help educate you further about how a trust can benefit you, protect your children and loved ones, and provide a way to support them in the future. 

Assembling Your Own (Estate Planning) Team

Some of us may enjoy games like fantasy football that allow us to assemble our own star team with the players we think will provide the most value. While fantasy football is fun to participate in, have you ever given thought to the importance of establishing your own dream team? Just like in fantasy football, each player has their own strengths and addresses a different part of the game that leads to the team’s overall success. Consequently, it is no secret that having a solid team of quality professionals allows us to ensure that all aspects of our future can be planned for. It can take an entire team, all with different strengths, to successfully plan for life’s foreseen and unforeseen events. Working with quality professionals enables you to ensure that you are creating the best possible comprehensive plan and that it is done the right way.

With a proper team of professionals, you can feel secure, knowing that all facets of your future are being considered when your team collectively strategizes the best structure to adequately address your finances, family dynamics, business ownership, insurance needs, and tax considerations, all while achieving the end goal of promoting family harmony.

Who Should Be on Your Team?

Estate Planning Attorney

In the intricate game of estate and legacy planning, an estate planning attorney often assumes a role similar to that of the quarterback, directing and coordinating the team’s strategies to achieve your desired outcomes. Their expertise allows them to create a plan that ensures that your money and property are protected, your loved ones are provided for, and your wishes are upheld, even beyond your lifetime. Our role is not limited to establishing wills and trusts—we have the ability to foresee common challenges, preserve family harmony, and ensure seamless transitions during life’s unpredictable events through comprehensive planning. Just as the quarterback anticipates opponents’ moves and directs the team accordingly, we can foresee legal challenges and ensure that all components of your plan for the future work harmoniously. 

Financial Advisor

Engaging a financial advisor as part of your team can be an investment in clarity and strategic financial management and growth. With the ever-changing economic landscape, navigating the financial realm can be daunting for both novices and more seasoned investors alike. A financial advisor can utilize their expertise to tailor strategies that align with your unique situation and future goals. Having a financial expert dedicated to your financial well-being allows for a proactive approach to wealth management, ensuring that potential opportunities are optimized and pitfalls are avoided. In essence, a financial advisor is not just a valuable team member but a cornerstone for a sound financial future, helping you build, preserve, and optimize your wealth for success.

Insurance Agent

Enlisting an insurance agent as part of your team is important to protect you and your loved ones against unforeseen events. An adept insurance agent can help you navigate which insurance is most appropriate to ensure that you are protected and prepared. Insurance agents can often use their industry experience to tailor recommendations based on your specific needs and circumstances. Beyond assisting you in selecting appropriate policies, a good insurance agent can help educate you about your coverage and explain sometimes complicated policy terminology. In a world filled with uncertainties, an insurance agent is a valuable team member, helping you strategically secure not only your accounts and property but also your peace of mind.

Tax Professional or Certified Public Accountant

Incorporating a tax professional or certified public accountant (CPA) into your team is a strategic move to ensure financial prudence and compliance. The complexities of tax codes, regulations, and deductions can be overwhelming, and even minor oversights can result in significant financial implications or potential penalties. A seasoned tax professional or CPA does not simply crunch numbers; they provide invaluable counsel, leveraging their expertise to optimize tax strategies, identify potential savings, and ensure accurate and timely filings. Beyond your annual tax needs, a tax professional or CPA can offer you year-round guidance, helping both individuals and businesses make informed decisions that align with both immediate needs and long-term goals. Ultimately, a tax professional or CPA is your safeguard against costly mistakes and the team member that can help protect your financial health. 

Spiritual Advisor

A spiritual advisor has the potential to serve as your team’s anchor amid life’s chaos. They can offer you guidance on important questions and inner challenges, helping you navigate the world and connect with deeper purposes. In a world that can often be focused on material pursuits, your spiritual advisor can help realign your focus with core values and holistic well-being.

Business Advisor

Lastly, a business advisor can serve as a valuable team member. In the complex world of business, where the market and strategies are consistently evolving, this team member can bring a wealth of expertise, fresh perspective, and objective analysis to your business. Their insight can serve to protect your business from costly mistakes and help formulate strategic plans that align with your business’s short- and long-term goals. Overall, a business advisor can ensure that your business is properly structured and optimized for success.

We Can Help

You may have already assembled your dream team, or there may be positions that still need to be filled. We are happy to assist you with your estate planning needs and provide you with referrals to quality professionals to finalize your team. 

Estate Planning Awareness Week Is Almost Here

Top 3 Reasons Your Clients Need an Estate Plan

Although we live in a world where information is easily accessible through the internet, there are still many misconceptions surrounding estate planning. Most individuals do not dedicate their time to learning more about a topic that they do not believe they need or could benefit from. There are some common beliefs that clients may have about estate planning that are inaccurate: that having a will avoids probate, being married means everything a spouse owns goes to their surviving spouse, and a person does not need an estate plan if they own few assets. Educating people on the importance of an estate plan is key to saving time, money, and heartache that can be associated with lack of planning. As an advisor, you understand the importance of having an estate plan and can help your clients understand that a comprehensive estate plan can not only contemplate what will happen after death, but also protect clients and their loved ones in the event of incapacity. 

While there are many important reasons to create an estate plan, we are going to focus and elaborate on three. 

Reason # 1: An estate plan lets loved ones know what the client wants.

People tend to avoid thinking about death and dying and do not discuss these topics with their loved ones. While these topics often evoke strong emotions, it can be important to discuss several aspects of what they want to happen after they die with their loved ones. Their loved ones probably know them best but may not know what steps to take when faced with loss and grief. Encouraging your clients to provide the important people in their life with guidance through estate planning will hopefully reduce any confusion or additional stress following their death. 

By establishing a comprehensive estate plan, your clients can decide and communicate what they want to happen with their money and property, but also make some important decisions regarding the care of their minor children, pets, and their own final arrangements. You should discuss the benefits of conveying their wishes to their family through estate planning because depending on their goals, there may be appropriate strategies that an experienced estate planning can educate them on that they may not have been previously aware of. 

Reason # 2: An estate plan is a legally enforceable way to carry out the client’s wishes.

When speaking to your clients about establishing an estate plan to ensure their wishes are carried out, some may believe that they do not need to memorialize these decisions because they are confident that their loved ones will follow their wishes. However, as many of us are aware, it is hard to predict what will happen in the future and when faced with financial difficulties or struggles, their loved ones may act differently than what they had wanted. For example, while some clients believe that adding children to their real property or bank accounts will protect them in the event of incapacity, and avoid probate, these situations come with significant risks. Adding a child to their property grants an ownership interest in said property, and when the parents die, the child becomes the sole owner and can do with the real estate as they please. This could result in the unfortunate result of their child cutting out siblings or other intended beneficiaries after the client’s death without recourse. While this is only one scenario, this is a great example to provide to your clients as to why creating an enforceable estate plan will make sure that all they have worked so hard for will end up with who they want. 

Reason # 3: The client gets to choose what happens.

Your clients may be hesitant to meet with an estate planning attorney to establish their estate plan for a variety of reasons, including a lack of education on the benefits of estate planning. It is important to let them know that if they do not create their own plan, the state will have one for them. The default estate plan (known as a state’s intestate statute) that controls the distribution of an estate may not align with their wishes. The state’s plan will not consider your client’s unique relationships and family structure. Blended families, parents of minor children, business owners, and unmarried couples are just a few groups that should strongly consider the consequences of not establishing a plan. 

An estate plan can protect clients from the consequences of incapacity that can occur as a result of an accident, injury, or illness. Without a plan, clients could be faced with a court-supervised conservatorship or guardianship, in which a court will delegate control of their person and property to another person, whom your client may not have chosen. As part of an estate plan, clients can choose who can act on their behalf in the event of incapacity. 

Everyone should have a choice in their future. A qualified estate planning attorney can help your clients create a plan that illustrates their wishes. If you or your clients have any questions or want to get started with the estate planning process, give us a call.

Estate Planning Roll Call: Crucial Legal Tools

As with any roll call, it is important to make sure that everyone is present and accounted for. Similarly, when assessing an estate plan, several tools, or documents, should be in attendance to create a complete and comprehensive plan. Most of your clients have likely heard the term estate planning, but they may not be familiar with which legal tools typically comprise a complete estate plan. You can teach them about the legal tools they should include in their plan and what protections and benefits each tool can provide.  

Will or Trust

As with many other structures, a well-rounded estate plan must be built on a solid foundation. To establish a foundation for an estate plan, the use of either a will or a trust is necessary. Wills and trusts are legal tools designed to direct and control the distribution of assets that a client owns. While a will can only provide direction at death, a trust has the added benefit of providing direction in the event of a client’s incapacity during their lifetime, as well as upon their death. Consequently, there are multiple considerations that go into whether using a will or trust as a foundational tool makes the most sense for a client. 

Will

A will often requires that the client’s assets go through the probate process upon their death, although certain assets can be transferred outside of probate if a beneficiary designation has been used or the asset was jointly owned with right of survivorship. In a will, clients elect an individual to be in control of carrying out their wishes and state who gets the client’s assets at their death. This person is commonly known as the executor, executrix, or personal representative, and they must be formally appointed by a probate court. It should be noted that some states have restrictions on who can serve in the role of executor, executrix, or personal representative. It is very important that clients meet with an experienced estate planning attorney to understand who to elect to serve in this role, as choosing the wrong individual can result in unnecessary delays. 

Trust

Alternatively, the use of a trust as a foundational estate planning tool can allow your clients to avoid the probate process and keep their affairs private. However, a trust can only avoid probate if it is properly and fully funded with the bank accounts and property that a client owns prior to death or transferred to their trust at their death. Additionally, trusts have the added benefit of protecting clients and their assets if they become incapacitated. 

Your clients may be surprised to find out that even when utilizing a trust as a foundational tool, they will still need a will. The type of will used in conjunction with a trust differs from a standalone will. Instead, a pour-over will is used, which essentially “pours” into the trust any assets that were not titled in the trust at the time of the client’s death. While a pour-over will ensures that assets not funded into the client’s trust during their lifetime are funded at their death, it also provides other essential benefits. A will allows a client to nominate a guardian for minor children and pets and provide direction for their funeral arrangements (in some states). 

A testamentary trust is another tool that may be appropriate for clients in certain circumstances. The terms of the trust are stated in a will during the client’s lifetime and the trust is created upon the client’s death. Like with a revocable living trust, clients can customize the provisions that control the distribution of assets through the trusts. However, this type of trust is created during the probate process.

There are a variety of considerations that can go into whether a will or trust is the right foundational tool for each client, which is why clients need to work with an experienced estate planning attorney to help ensure they have the right foundational tools for their unique situation. 

Financial Power of Attorney

Most of your clients have likely heard the term power of attorney before. However, they may not realize that each power of attorney and the level and type of authority granted within it varies based on its contents. A financial power of attorney can often be customized to accomplish specific goals, but may have some limitations depending on state law. It is helpful to first understand the roles within a financial power of attorney. The person who creates it is known as the principal, and the person who receives the authority through it is the agent. An agent’s role is to act as a fiduciary and on behalf of the principal for a variety of purposes. 

Under a limited power of attorney, the agent is limited to performing very specific duties, such as executing a deed for a real estate transaction or transferring a vehicle. On the contrary, a general power of attorney allows the agent to step into the principal’s shoes and manage almost all aspects of their finances and property ownership to the extent of what is allowable under state law.

A financial power of attorney can take effect immediately (or as soon as the agent has officially accepted the role) or it can be springing. A springing power of attorney requires that a certain event occur before the agent can exercise their power. This is usually upon the declaration that the principal can no longer act for themselves. It is important to note that not all states allow for a springing power of attorney.

Lastly, there is a durable power of attorney. A durable power of attorney lasts through the principal’s incapacity, making it crucial for incapacity planning. 

Medical Power of Attorney

Our health and the way we manage it is largely dependent on our own beliefs and preferences. If we were unable to make our own medical choices, we would want to make sure that the person making our medical decisions was someone that we trusted would follow our wishes. It is important that clients understand that through their estate plan they can decide who will manage their care and make medical decisions in the event they are unable to do so. To have this control, their estate plan should include a medical power of attorney. A medical power of attorney is known by several names depending on what state you are in, such as a healthcare power of attorney or a designation of health care surrogate. Your client will designate an agent and several successor agents in their medical power of attorney to act on their behalf. Some states allow clients to choose to delay the effect of the authority granted until incapacity. 

Advance Directive

A comprehensive estate plan will also include an advance healthcare directive, also commonly known as a living will. This legal tool serves the important purpose of allowing your clients to memorialize what forms of end-of-life care they would like. Within a living will, they can record their wishes as it relates to being placed on life support if they are in a persistent vegetative state or diagnosed with a terminal illness with no probable chance of recovery. This tool is commonly confused with a do not resuscitate order, which is not part of an estate plan and is instead typically filled out at the hospital and applies specifically to resuscitation. 

HIPAA

Health Insurance and Accountability Act of 1996 (HIPAA) authorizations allow an individual to designate who the hospital or medical facilities can provide medical records and information to. These authorization forms became necessary following the enactment of the federal Health Insurance and Accountability Act of 1996, which provides guidelines to the healthcare industry for the protection of patient information. This is an important legal tool to have if there are multiple individuals who are not nominated under the client’s medical power of attorney, but the client wants them to have access to their medical information in the event of illness or injury. While the individuals will not have decision-making authority, they will be able to stay informed about the client’s medical condition. 

Appointment of Guardian

Planning for children is a high priority for parents. There are some states that have a separate legal document for guardianship of minor children. While a lot of states allow a client to include this information in their will, it is important for your client to meet with an estate planning attorney who can create a standalone legal tool if it is appropriate within your client’s state of residence. 

Temporary Guardianship or Delegation of Parental Authority 

There are circumstances in which clients may not be able to be with their children, commonly due to extended travel. This can be an appropriate circumstance for your client to nominate a temporary legal guardian to make decisions on behalf of the minor child. There are state-specific guidelines for the length of these temporary guardianships in addition to other limitations as to how and what decisions can be delegated to another individual. 

Roll call complete! Now that you have learned about the legal tools that should be present in a client’s estate plan, you can further educate your clients and offer to connect them with an estate planning attorney to ensure that they have all of the essentials in attendance. 

Do Not Let Your Clients Become a Statistic 

You spend countless hours helping clients establish a solid financial plan for the future, so why not take the time to tell them about the benefits of creating an estate plan to align with their financial plan? As a trusted advisor to your clients, we are confident that you do not want to see them become a statistic because of a lack of planning. 

Most People Do Not Have a Will or Trust

Only one in three Americans have a will or trust. This statistic is not surprising due to the amount of misinformation and fear around establishing an estate plan. One in three Americans who do not have a will or trust believe they do not have enough money or property to justify having an estate plan. The belief that estate planning is only for the wealthy is just one reason people put off planning; other reasons include being too busy, viewing it as too complicated or expensive, or fear of discussing death. 

It Is Not Always Known if Someone Has an Estate Plan

Some people may not see the point in discussing death with their loved ones, but having this difficult discussion can serve several purposes. Surprisingly, 52 percent of people do not know where their parents keep their estate planning documents, and only 46 percent of will executors are aware that they are named in someone’s will. It is important that your clients tell their loved ones where they store their important legal documents, as loved ones may need to access original legal documents for multiple reasons. Additionally, when establishing a plan, your clients must tell the individuals named in their documents that they have been chosen to serve in these roles. These discussions should focus on what their responsibilities are and highlight the client’s wishes. Some estate planning attorneys offer family meetings after an estate plan is created to educate the individuals named in the client’s plan on the role they will play. 

Conflicts Are Common

According to a survey conducted by LegalShield, 58 percent of adults in the United States say they or someone they know have experienced familial conflicts due to not having an estate plan or a will. Conflicts can arise from a lack of proper planning. Often these conflicts are related to arguments over how assets should be distributed after a loved one’s passing. You should advise your clients that working with an experienced estate planning attorney can assist in reducing family conflicts and disagreements that could ultimately end in estrangement. 

Now Is the Right Time for Your Clients to Plan

Proper planning has always been important. American retirees expect to transfer more than $36 trillion to their families, friends, nonprofits, and additional beneficiaries over the next 30 years. This figure indicates an increased need to have a comprehensive financial and estate plan. You can help benefit your clients by assisting them in creating their financial plan and encouraging them to avoid the estate planning statistics. If you or your clients have any questions about creating or updating an estate plan, please reach out to us.

Estate Planning Awareness Week Is Almost Here

Top 3 Reasons You Need an Up-to-Date Estate Plan

Although we live in a world where information is easily accessible through the internet, there are still many misconceptions surrounding estate planning. Most of us do not dedicate our time to learning more about topics like estate planning, because we may not know that we need an estate plan or realize the benefits associated with having one. There are some common beliefs you may have about estate planning that may be inaccurate: that having a will avoids probate, being married means everything a spouse owns goes to their surviving spouse, and a person does not need an estate plan if they own few assets. Education on the importance of an estate plan is key to saving the time, money, and heartache that can be associated with lack of planning. Take the time to understand the importance of having an up-to-date estate plan and learn how it not only contemplates what happens after your death, but also protects you and your loved ones if you become incapacitated. 

While there are many reasons to establish and update an estate plan, we are going to focus on three.

Reason # 1: An estate plan lets your loved ones know what you want.

People tend to avoid thinking about death and dying and do not discuss these topics with their loved ones. While these topics often evoke strong emotions, it can be important to discuss with your loved ones several aspects of what you want to happen after you die. They may not know what steps to take when faced with loss and grief over your death. You should provide the important people in your life with up-to-date guidance through your estate plan, and in turn reduce any confusion or additional stress following your death. This is especially important if you have had any major changes in your life such as the birth or death of a loved one.

By having an up-to-date, comprehensive estate plan, you can decide and communicate what you want to happen with your money and property, but also make important decisions regarding the care of your minor children and pets and your own final arrangements. There are many benefits of conveying your wishes to your family through an up-to-date estate plan. There may also be appropriate strategies and documents for your particular family structure that you may not be aware of that can provide you and your loved ones with extensive benefits.  

Reason # 2: An estate plan is a legally enforceable way to carry out your wishes.

You may think you do not need to memorialize your decisions about what will happen to your property after you die because you are confident that your loved ones will follow your wishes. However, it is hard to predict what will happen in the future, and when faced with financial difficulties, your loved ones may act differently than how you had hoped. For example, while you may think that adding a child to the title of your real property or bank accounts will protect you in the event of incapacity and avoid probate, doing so creates significant risks. Adding a child to your property grants them an ownership interest in that property, and when you die, your child will be the sole owner and can do whatever they want with that property. This could result in your child preventing siblings or other intended beneficiaries from sharing money or property after your death without recourse. Keep in mind that a child may do this out of what they perceive as necessity due to financial struggles or other issues. While this is only one scenario, this is an example as to why creating an enforceable estate plan with an experienced estate planning attorney will make sure that all you have worked so hard for will end up going to who you want without conflict. 

Reason # 3: You get to choose what happens.

You may be hesitant to meet with an estate planning attorney to establish or update your estate plan for a variety of reasons, including a lack of education on the benefits of up-to-date estate planning. It is important to know that if you do not create your own plan or if your estate plan does not cover everything, the state has its own plan. The default estate plan, known as a state’s intestate statute, that controls the distribution of your money and property may not align with your wishes. The state’s plan will not take into consideration your unique relationships and family structure. If you are part of a blended family, a parent of minor children, a business owner, or part of an unmarried couple, you should strongly consider the consequences of not establishing a plan. 

An estate plan can protect you from the consequences of incapacity that can occur as a result of an accident, injury, or illness. Without a plan, you could be faced with a court-supervised conservatorship or guardianship, in which the court will delegate the control of your person and property to a person whom you may not have chosen or would not want to serve in this capacity. As part of your estate plan, you can choose who can act on your behalf in the event of incapacity and avoid court involvement and the difficulties associated with it. However, it is important that you review your documents periodically to make sure that the people you have chosen to make sensitive decisions for you are still the people you want to do so.

Everyone should have a choice in their future. A qualified estate planning attorney can help you create a plan that illustrates your wishes. If you or your loved ones have any questions about creating or updating an estate plan, please give us a call.

Estate Planning Roll Call: Important Legal Tools You Should Have

As with any roll call, it is important to make sure that everyone is present and accounted for. Similarly, when assessing an estate plan, several legal tools, or documents, should be in attendance to accomplish the goal of a complete and comprehensive plan. You have likely heard the term estate planning, but you may not be familiar with which legal tools typically comprise a complete estate plan. We want to teach you about the legal tools that should be included in your plan and what benefits and protections each legal tool can provide.  

Will or Revocable Living Trust

As with many other structures, a well-rounded estate plan must be built on a solid foundation. To establish a foundation for an estate plan, the use of either a will or a revocable living trust (trust) is necessary. Wills and trusts are legal tools designed to direct and control the distribution of money and property that you own. While a will can only provide direction at death, a trust has the added benefit of providing direction in the event of your incapacity during your lifetime, as well as upon your death. Consequently, there are multiple considerations that go into whether using a will or trust as a foundational tool makes the most sense for your situation. 

Will

A will as a foundational legal tool often requires that your property go through the probate process upon your death, although certain accounts and property can be transferred outside of probate through the use of beneficiary designations or if the account or property is jointly owned with a right of survivorship. Probate is the court-supervised process in which everything you own is transferred to your loved ones (also known as beneficiaries, or heirs if you do not have a will) at your death. In your will, you elect an individual to be in control of carrying out your wishes and state who gets your accounts and property at your death. This person is commonly known as the executor, executrix, or personal representative. Prior to being able to carry out your wishes, they must be formally appointed by the probate court. It should be noted that some states have restrictions on who can serve in the role of executor, executrix, or personal representative. It is very important that you meet with an experienced estate planning attorney to understand who to elect to serve in this role, as choosing the wrong individual can result in unnecessary delays.  

Trust

Alternatively, the use of a trust as a foundational estate planning tool can allow you to avoid the probate process. However, a trust can only avoid probate when bank accounts and property that you own are retitled (also called funded) into the trust prior to your death or transferred to your trust at your death. Additionally, trusts have the added benefit of protecting your accounts and property that are part of the trust if you become unable to manage your own affairs. 

You may be surprised to find out that even when utilizing a trust as a foundational legal tool, you still need a will. The type of will used in conjunction with a trust differs from a standalone will. Instead, a pour-over will is used, which essentially “pours” into the trust any accounts or property that were not titled in the trust at the time of your death. While a pour-over will ensures that accounts and property not funded into your trust during your lifetime are funded at your death, it also provides other essential benefits. A will allows you to nominate a guardian for your minor children and pets and direct your funeral arrangements (in some states). 

A testamentary trust is another tool that may be appropriate for you in certain circumstances. The terms of the trust are stated in a will during your lifetime and the trust is created upon your death. Like with a revocable living trust, you can customize the provisions that control the distribution of money and property through the trusts. However, this type of trust is created during the probate process.

There are a variety of considerations that go into whether a will or trust is the right foundational tool, which is why it is best to speak with an experienced estate planning attorney to help ensure you choose the right one for your unique situation. 

Financial Power of Attorney

You have likely heard the term power of attorney before. However, you may not realize that each financial power of attorney and the level and type of authority granted within it varies based on its contents. These legal tools can often be customized to accomplish specific goals, but may have some limitations depending on state law. It is helpful to first understand the roles within a financial power of attorney. The person who creates it is known as the principal, and the person who receives the authority through it is the agent. An agent’s role is to act as a fiduciary and on behalf of the principal for a variety of purposes. 

Under a limited power of attorney, the agent is limited to performing very specific duties, such as executing a deed for a real estate transaction or transferring a vehicle. On the contrary, a general power of attorney allows the agent to step into the principal’s shoes and manage almost all aspects of their finances and property ownership to the extent of what is allowable under state law.

A financial power of attorney can take effect immediately (or as soon as the agent has officially accepted the role) or it can be springing. A springing power of attorney requires that a certain event occur before the agent can exercise their power. This is usually upon the declaration that the principal can no longer act for themselves. It is important to note that not all states allow for a springing power of attorney.

Lastly, there is a durable power of attorney. A durable power of attorney lasts through the principal’s incapacity, making it crucial for being able to grant someone authority to act for you if you cannot act for yourself. 

Medical Power of Attorney

Our health and the way we manage it is largely dependent on our own beliefs and preferences. If you are unable to make your own medical decisions, you would likely want to make sure that the person making them for you is someone that you trust and who would follow your wishes. To have this control, your estate plan should include a medical power of attorney. A medical power of attorney is known by several names depending on what state you are in, such as a healthcare power of attorney or a designation of health care surrogate. You will designate an agent and several backup agents in your medical power of attorney to act on your behalf if your first choice is unavailable. You may be able to choose to delay the effect of the authority granted until incapacity if your state’s law allows. 

Advance Directive

A comprehensive estate plan will also include an advance healthcare directive, also commonly known as a living will. An advance directive serves the important purpose of allowing you to decide what forms of end-of-life care you would like. Within this legal tool, you can memorialize your wishes as it relates to being placed on life support if you are in a persistent vegetative state or diagnosed with a terminal illness with no probable chance of recovery. This legal tool is commonly confused with a do not resuscitate order, which is not part of an estate plan and instead is typically filled out at the hospital and applies specifically to resuscitation. 

HIPAA

Health Insurance and Accountability Act of 1996 (HIPAA) authorizations allow an individual to designate who the hospital or medical facilities can provide medical records and information to. These authorization forms became necessary following the enactment of the federal Health Insurance and Accountability Act of 1996, which provides guidelines to the healthcare industry for the protection of patient information. This is an important legal tool to have if you have multiple individuals who are not nominated under your medical power of attorney that you would like to have access to your medical information in the event of illness or injury. While these individuals will not have decision-making authority, they will be able to stay informed about your medical condition. 

Appointment of Guardian

Planning for children is a high priority for parents. There are some states that have a separate legal tool for naming guardians of minor children. While a lot of states allow you to include this information in your will, it is important for you to meet with an estate planning attorney who can create a standalone tool if it is appropriate within your state of residence. 

Temporary Guardianship or Delegation of Parental Powers 

There are circumstances in which you may not be able to be with your children, commonly due to extended travel. This can be an appropriate circumstance for you to name a temporary legal guardian to make decisions on behalf of your minor child while you are unable to do so. There are state-specific guidelines for the length of temporary guardianships in addition to other limitations as to how and what decisions can be delegated to another individual. 

Roll call complete! Now that you have learned more about what tools should be present in your estate plan, you can ensure that you have all of the essentials in attendance when you begin the estate planning process. 

Do Not Become a Statistic 

Estate planning is important for everyone. It is about protecting yourself, your loved ones, and your hard-earned money (even if you do not have a lot of it). However, the numbers do not lie: most people do not see the importance of estate planning. Whether you need to create an estate plan or update an existing one, do not put it off. The following are some scary statistics about the average American and estate plans. We are committed to working with our clients to make sure they do not become a statistic.

Most People Do Not Have a Will or Trust

Only one in three Americans have a will or trust. This statistic is not surprising due to the amount of misinformation and fear around establishing an estate plan. One in three Americans who do not have a will or trust believe they do not have enough money or property to justify having an estate plan. The belief that estate planning is only for the wealthy is just one reason people put off planning; other reasons include being too busy, viewing it as too complicated or expensive, or fear of discussing death. While these may all be valid reasons, the benefits of planning far outweigh delaying the process. 

People Do Not Always Tell Others That They Have an Estate Plan

Some people may not see the point in discussing death with their loved ones, but having this difficult discussion can serve several purposes. Surprisingly, 52 percent of people do not know where their parents keep their estate planning documents, and only 46 percent of executors are aware that they are named in someone’s will. It is important to discuss with your loved ones where your important documents are stored, as they may need to access your original documents for multiple reasons. Additionally, when establishing or updating a plan, you must tell the individuals named in your documents that they have been chosen to serve in these roles. These discussions should focus on what their responsibilities are and highlight your wishes. Some estate planning attorneys offer family meetings after creating an estate plan to educate the individuals named in your plan on the roles they will play. 

Conflicts Are Common

According to a survey conducted by LegalShield, 58 percent of adults in the United States say they or someone they know have experienced familial conflicts due to not having an estate plan or a will. Conflicts can arise from a lack of proper planning. Often these conflicts are related to arguments over how accounts and property should be distributed after a loved one’s passing. You should work with an experienced estate planning attorney to assist in establishing a plan that will reduce family conflicts and disagreements that could end in estrangement. 

Now Is the Right Time to Create or Update Your Plan

Proper planning has always been important. American retirees expect to transfer more than $36 trillion to their families, friends, nonprofits, and additional beneficiaries over the next 30 years. This figure indicates an increased need to have a comprehensive financial and estate plan. Now is the time to set your fears aside and begin or continue the planning process so that you can avoid becoming an estate planning statistic. If you or your loved ones have questions about creating or updating your estate plan, please give us a call.

Hunger Action Month

September is recognized as Hunger Action Month, originally established by Feeding America in 2008. Hunger Action Month is an annual nationwide campaign that occurs each September to raise awareness about hunger in America and inspire action. According to the USDA, more than 34 million people, including 9 million children, are food insecure. Food insecurity is defined by the USDA as “a lack of consistent access to enough food for every person in a household to live an active, healthy life.” Sadly, the pandemic increased this issue among families with children and communities of color. Consequently, food insecurity has a wide impact, contributing to serious health issues and lack of nutrition for young children and forcing families to choose between food, rent, medicine, healthcare, and transportation. 

Numerous methods exist to contribute to the mission of eradicating hunger in the United States. As a financial advisor, one effective approach is to educate your clients about supporting charitable causes by incorporating charitable planning structures into their estate plans. Your clients who wish to make charitable contributions might not be fully aware of the diverse opportunities and tax advantages possible through this type of planning. Among various other strategies, two commonly used trusts are the charitable remainder trust and the charitable lead trust, each offering multiple tax benefits for clients.  

A charitable remainder trust is an irrevocable trust that is tax-exempt at the trust level and designed to allow for a partial charitable tax deduction. This trust structure works well when funding assets that have grown in value over the years (i.e., low-basis assets). Once the account or property is funded into the trust, the account is liquidated or the property is sold, and the money is invested to ultimately produce a stream of income. The sale avoids capital gains tax at the trust level because the trust is liquidating the account or selling the property. However, the noncharitable recipient of the income stream will be responsible for any income tax on the distributions. This structure allows your client to maintain the benefit by receiving distributions annually for a term of years, and at the end of the term, the charity your client has designated will receive the remainder. Also, the client is able to remove further appreciation from their estate. 

A charitable lead trust is similar in that this irrevocable trust is funded with property or accounts that have grown in value, but it differs in that the charity receives the income stream for a term of years, and at the end of the term, the beneficiaries the client has chosen will receive the remainder. With a charitable lead trust, the client or trust (depending on the type of charitable lead trust created) will pay the income tax, but the client will receive a tax deduction at either the beginning or end of the trust depending on the type of charitable lead trust used. While not all clients can benefit from these planning techniques, charitably inclined clients still have the ability to contribute by leaving a portion of their estate to local food banks, soup kitchens, or other qualified tax-exempt organizations fighting to end hunger. 

Some clients may be eager to support the crucial goal of ending hunger but may not have the ability or inclination to engage in complex charitable planning within their estate. However, there are still incredibly meaningful ways for these clients to contribute to this vital cause. One approach is by making financial donations to their local food banks, Feeding America, or other charitable organizations actively working to fight hunger. These gifts could be made during your clients’ lifetimes, or the organization can be left a sum of money at your clients’ death through their wills or trusts.

Moreover, actively participating in volunteer activities at local food banks or soup kitchens can be a rewarding and enlightening way to directly support the mission of ending hunger. Clients can play an essential role in tackling this issue by engaging on the front lines and dedicating their time and effort to these local organizations. In addition, involving their children in volunteer activities can foster a sense of responsibility and compassion for this important cause, creating a charitable legacy of giving that could span generations. 

Empowering your clients to support charitable causes through their estate planning, donations, and volunteering can all be meaningful ways to contribute to ending hunger in the United States. By educating your clients about the opportunities and associated benefits, you can help them make a positive impact on society while also providing them with valuable tax benefits. 

If you are interested in learning more about how your clients can increase their impact on charities that are close to their hearts, call us to schedule an appointment.

Help Your Clients with Their Self-Care This September

September is National Self-Care Awareness Month. The purpose of this observance is to raise awareness about the importance of regular self-care. What constitutes self-care can vary widely depending on who you are speaking to. Regardless of the exact definition, taking action to engage in self-care is essential to overall emotional and physical well-being and should be prioritized. You may be wondering what role you can play in assisting your clients in prioritizing self-care this month. 

Self-care is not a term that can be limited to one definition. Achieving self-care varies depending on the individual and their current needs and circumstances. For one client, self-care could be scheduling a day full of pampering, from pedicures to shopping for new clothes, while for another client, self-care could include going for a run, visiting a therapist, and having a family dinner. The importance of self-care hinges on taking actions to ensure mental and physical well-being. It is important to acknowledge that self-care takes many forms, and as a trusted advisor, you are positioned to help your clients celebrate self-care this month in a unique and valuable way.  

While it is natural to include in the definition of self-care tasks that address an immediate need or want, we should also include actions that can provide us with peace of mind for the future. Many individuals avoid taking steps to plan for the future out of fear and uncertainty. Their fear likely stems from not knowing how to solve potential future problems. Most clients share common fears, such as not having saved enough, not being able to retire when they would like, not being fully protected in the event of disability, or their loved ones not being fully protected in the event of the client’s death. Luckily, you can help clients reduce their fear and anxiety by addressing their concerns and assisting them in creating a well-rounded financial plan. You should take the time to address their concerns by discussing their current monthly expenses and how much they need in savings for an emergency, their retirement goals and how much they should be contributing currently, and how much they should maintain in both life insurance and disability insurance to adequately plan for death and disability. 

Discuss with your clients the benefits of working with an estate planning professional who can help them understand what will happen if they become unable to work or make their own decisions. They will have to carefully consider whom they would want to make both their financial and medical decisions if they are unable to do so themselves. Most married individuals choose to name each other as well as additional individuals who could act if their spouse cannot. For financial decisions, a client should consider what characteristics are important to them in deciding who would manage their finances. Clients may seek to appoint an individual who is financially prudent, trustworthy, and level-headed. Once the decision is made as to who should serve, a financial power of attorney should be created to memorialize this decision. Individualized provisions may need to be included if your client is a business owner, anticipates the need to apply for governmental benefits, or is utilizing a trust as part of their estate plan. 

For medical decisions, your client may want to choose an individual who is comfortable with medical decision-making, is dependable, and will honor the client’s wishes. A designation of healthcare surrogate or medical power of attorney will grant the individual they choose the necessary legal authority to make medical decisions in the event they are unable to do so. Clients may name the same individual to make their financial and medical decisions, but they should carefully consider the characteristics that matter the most to them when appointing individuals to act on their behalf. You can also help prepare your clients for this important conversation by advising them that an attorney will likely discuss with them what level of life-sustaining care they would like to receive if they are diagnosed with an end-stage medical condition or terminal illness or are in a persistent vegetative state. Their decisions will be reflected within a living will or advance directive. While making these decisions can be difficult, creating a living will can ease the burden caused by tasking a loved one with these choices. Lastly, a HIPAA designation can also be created to allow clients to designate who should have access to their medical information. While creating a comprehensive estate plan may result in difficult and uncomfortable conversations, it allows your clients to make decisions proactively rather than in the midst of a crisis. Ultimately, this process can provide them with peace of mind by removing the lingering uncertainties that can accompany common fears of future events. 

Uncertainty about what will happen to ourselves in the event of severe injury, illness, or death can contribute to a less-than-ideal mental state. Encouraging your clients to face these issues head-on and engage in self-care by answering these questions proactively and implementing a plan truly embraces the spirit of Self-Care Awareness month and can allow your clients to enjoy the peace of mind that comes with knowing they are protected no matter what.

If you are interested in discussing additional ways we can collaborate to help clients care for themselves and their loved ones with a comprehensive estate and financial plan, please give us a call.  

Hunger Action Month 

September is recognized as Hunger Action Month, originally established by Feeding America in 2008. Hunger Action Month is an annual nationwide campaign that occurs each September to raise awareness about hunger in America and inspire action. According to the USDA, more than 34 million people, including 9 million children, are food insecure. Food insecurity is defined by the USDA as “a lack of consistent access to enough food for every person in a household to live an active, healthy life.” Sadly, the pandemic increased this issue among families with children and communities of color. Consequently, food insecurity has a wide impact, contributing to serious health issues and lack of nutrition for young children and forcing families to choose between food, rent, medicine, healthcare, and transportation. 

Numerous methods exist to contribute to the mission of eradicating hunger in the United States. You should meet with a qualified estate planning attorney to learn more about supporting charitable causes by incorporating charitable planning structures into your estate plan. If you wish to make meaningful charitable contributions, you may not be fully aware of the diverse opportunities and tax advantages possible through this type of planning. Among various other strategies, two commonly used trusts are the charitable remainder trust and the charitable lead trust, each offering multiple tax benefits while supporting important causes.

A charitable remainder trust is an irrevocable trust that is tax-exempt at the trust level and designed to allow for a partial charitable tax deduction. This trust structure works well when funding an account or property that has grown in value over the years (i.e., low-basis assets). Once the account or property is funded into the trust, the account is liquidated or property is sold, and the money is invested to ultimately produce a stream of income. The sale avoids capital gains tax at the trust level because the trust is liquidating the account or selling the property. However, the noncharitable recipient of the income stream will be responsible for any income tax on the distributions. This structure allows you to maintain the benefit by receiving distributions annually for a term of years, and at the end of the term, the charity you have designated will receive the remaining funds or property. Also, you are able to remove further appreciation from your estate.

A charitable lead trust is similar in that this irrevocable trust is funded with property or accounts that have grown in value, but it differs in that the charity receives the income stream for a term of years, and at the end of the term, the beneficiaries you have chosen will receive the remaining funds or property. With a charitable lead trust, you or the trust (depending on the type of charitable lead trust created) will pay the income tax, but you will receive a tax deduction at either the beginning or end of the trust depending on the type of charitable lead trust used. While these structures can provide valuable benefits to the parties and organizations involved, you may not feel that they fit within your current charitable goals. 

You may be eager to support the crucial goal of ending hunger but may not have the ability or inclination to engage in complex charitable planning at this time. However, there are still incredibly meaningful ways for you to contribute to this vital cause. One approach is by making lifetime financial donations to local food banks, Feeding America, or other charitable organizations actively working to fight hunger. If lifetime gifting is not an option, you can leave a one-time gift at your death through your estate plan to local food banks, soup kitchens, or other organizations fighting to end hunger. 

Moreover, actively participating in volunteer activities at local food banks or soup kitchens can be a rewarding and enlightening way to directly support the mission of ending hunger. You can play an essential role in tackling this issue by engaging on the front lines and dedicating your time and effort to these local organizations. In addition, involving your children or grandchildren in volunteer activities can foster a sense of responsibility and compassion for this important cause, creating a charitable legacy of giving that could span generations. 

You have the ability to support charitable causes through estate planning, donations, and volunteering, which are all meaningful ways to contribute to ending hunger in the United States. By learning more about the opportunities and associated benefits with charitable planning, you can make a positive impact on society while receiving valuable tax benefits. 

If you are interested in learning more about charitable giving and how it can be incorporated into your estate plan, give us a call to schedule an appointment.

Use National Self-Care Month to Care for Your Future

September is National Self-Care Awareness Month. The purpose of this observance is to raise awareness about the importance of regular self-care. What constitutes self-care can vary widely depending on who you are speaking to. Regardless of the exact definition, taking actions to prioritize self-care is essential to overall emotional and physical well-being and should be prioritized. You likely have an idea of what defines self-care and what self-care means to you, but you may be surprised to hear you could be missing the full picture.

Self-care is not a term that can be limited to one definition. Achieving self-care varies depending on the individual and their current needs and circumstances. To one individual, self-care could be scheduling a day full of pampering, from pedicures to shopping for new clothes, while to another, self-care could include going for a run, visiting a therapist, and having a family dinner. The importance of self-care hinges on taking actions to ensure mental and physical well-being. It is important to acknowledge that self-care takes many forms, including valuable and impactful actions you may have overlooked.  

While it is natural to include in the definition of self-care tasks that address an immediate need or want, we should also include tasks that can provide us with peace of mind for the future. You may be avoiding taking steps to plan for the future out of fear and uncertainty. Your fear likely stems from not knowing where to start and how to solve potential future problems. You may share common fears that many of us have, such as not having saved enough, not being able to retire when you would like, not being fully protected in the event of disability, or your loved ones not being fully protected in the event of your death. Luckily, you are not alone and can take steps to reduce your fear and anxiety by working with a professional who can address your concerns and create a well-rounded plan. One step in your journey toward self-care is to meet with a financial advisor and discuss your current monthly expenses and how much you should have in savings for an emergency, your retirement goals and how much you should be contributing currently, and how much you should maintain in both life insurance and disability insurance to adequately plan for death and disability. 

You should also meet with an estate planning professional, who can help ease your mind about the future by talking through the best ways to protect yourself and your loved ones in the event of injury, illness, or death. We can help you understand what will happen if you are injured and unable to make your own decisions. You will have to carefully consider whom you would want to designate to make both your financial and medical decisions if you are unable to do so yourself. If you are married, you might choose to name your spouse and additional individuals who could act if your spouse cannot. If you are not married, you might choose an adult child or trusted friend, as well as additional individuals to act in the event your first choice cannot. 

For financial decisions, you should consider what characteristics are important to you in deciding who would manage your finances. You may seek to appoint an individual who is financially prudent, trustworthy, and level-headed. Once the decision is made as to who should serve, a financial power of attorney should be created to memorialize this decision and give it legal effect. A financial power of attorney can grant varying degrees of authority to the individual you select. Individualized provisions may need to be included if you are a business owner, anticipate the need to apply for governmental benefits such as Medicaid, or are utilizing a trust as part of your estate plan. 

For medical decisions, you may want to choose an individual who is comfortable with medical decision-making, is dependable, and will honor your wishes. Creating a designation of healthcare surrogate or medical power of attorney will grant the individual you choose the necessary legal authority to make medical decisions in the event you are unable to do so. You may name the same individual to make financial and medical decisions for you, but you should carefully consider the characteristics that matter the most to you when appointing individuals to act on your behalf. Your attorney will likely discuss with you what level of life-sustaining care you would like to receive if you are diagnosed with an end-stage medical condition or terminal illness or are in a persistent vegetative state. Your decisions will be reflected within a living will or advance directive. While making these decisions can be difficult, creating a living will can ease the burden caused by tasking a loved one with these choices. Lastly, a HIPAA designation can also be created to allow you to designate who should have access to your medical information. While creating a comprehensive estate plan may result in difficult and uncomfortable conversations, it allows you to make decisions proactively rather than in the midst of a crisis. Ultimately this process can provide you with peace of mind by removing the lingering uncertainties that can accompany common fears of future events. 

Uncertainty about what will happen to you or your loved ones in the event of severe injury, illness, or death can contribute to a less-than-ideal mental state. You should prioritize your own self-care by facing these issues head-on and allowing yourself to enjoy the peace of mind that comes with creating a plan. Remember that you are not alone, and there are financial and estate planning professionals who can assist you in answering these questions proactively and implementing a plan, which we believe truly embraces the spirit of Self-Care Awareness month.  

If you are interested in learning more about estate planning and how it can provide you and your loved ones with peace of mind, give us a call to schedule an appointment.

Celebrating the Upcoming Holidays with an Up-to-Date Estate Plan

National Grandparents Day: Three Things to Consider Before You Make a Gift to Grandchildren

As grandparents, you likely love the opportunity to shower your grandchildren with gifts. In most cases, these gifts are given on holidays and birthdays and commonly consist of an item that may have been at the top of your grandchild’s wish list. While experiencing the joy on your grandchild’s face when they open a new doll or new race car is immeasurable, it is not uncommon to want to leave more substantial and meaningful gifts to your grandchildren. Christmas and birthday gifts can leave lasting impressions on your grandchildren, but you may want to provide them with a gift that can assist them in building a savings account, furthering their education, or purchasing their first home, to name just a few. We hope this information will assist you in analyzing the important details of making a gift that can often be overlooked. 

  1. When do you want to make a gift?  

When considering making a financial gift to your grandchildren, the first crucial decision is when to give them this gift. Various factors may influence your choice of timing. If your grandchildren are slightly older and are exploring college options, you might consider gifting them funds to assist with their chosen educational path. Similarly, if you have adult grandchildren preparing to buy a home, planning a wedding, or expecting their first child, you may wish to offer them a monetary gift sooner rather than later to support these significant life moments. Making a gift during your lifetime allows you to witness the impact it will have on the recipients, which can be incredibly rewarding and meaningful. 

However, there are instances where a gift given after your passing can carry equal significance. If you have younger grandchildren, planning for their postsecondary education, purchasing their first home, or starting their own business may be in the distant future. In cases such as these, you may feel more comfortable leaving money to your grandchild at your death since their need is not immediate. Your gift, although delayed, can still help support their future, it can provide them with much-needed financial assistance, and ultimately, it will leave them with a lasting memory of your love and generosity. 

  1. Can you afford to leave a gift to them?  

If you have not already, consider meeting with a financial advisor to help you develop long-term plans that align with your financial goals and take into consideration the ever-changing costs of living. A responsible advisor will likely perform an analysis of your current financial situation, along with your goals for the future, and help you determine the best methods to prepare for your financial future. This may involve your advisor recommending that you not take certain risks or make any considerable gifts. 

If it is your desire to leave a gift to your grandchildren, you will need to assess if it fits within your current financial capabilities. Planning for your future requires careful consideration of the potential costs for care, especially if more substantial or institutionalized medical or long-term care becomes necessary. The Administration on Aging estimates that at least 70 percent of people who are 65 today will require care in some context. Notably, the national median annual costs for nursing home care in 2023 have risen to approximately $108,405 for a private room, compared to $92,376 in 2016. The average length of stay in long-term care is 3.2 years. Just over 20 percent of residents will require care for 5 years or longer. For those who are currently married, it becomes essential to not only thoughtfully weigh your own current and future needs, but also those of your spouse. With the rising costs of care, you must consider whether your surviving spouse will need to rely on your remaining funds for their livelihood. 

While your intentions to provide a significant gift to your grandchildren are admirable, it may not always be practical or feasible given your current and future financial situation. If you wish to create a plan that includes a gift for your grandchildren, consulting with an experienced estate planning attorney is recommended. Together, you can devise a well-crafted plan that ensures that the gift is made when both you are no longer living, if funds are available. This way, you can better align your intentions with your financial circumstances, which ultimately safeguards your family’s future

  1. What impact will the gift have? 

Lastly, you should consider both the potential positive and negative aspects of gifting to your grandchildren. Gifting to a grandchild and the gift’s subsequent impact may depend largely on your goals in making the gift. As it is, giving your grandchildren monetary gifts can enable you to provide them with opportunities that may not have been available to you earlier in life. Gifting can allow your grandchildren to have new experiences, build a nest egg, and invest in their future. Ultimately, these gifts can result in a profound and lasting impact on your grandchildren’s future. 

On the other hand, depending on how the gift is structured, it could impact your grandchild’s ability to receive assistance with education by impacting the amount of assets required to be listed on their Free Application for Federal Student Aid (FAFSA). In some cases, providing a large sum of money to a child or young adult can have the negative consequence of disincentivizing them to obtain or maintain employment or continue or complete their education. Large gifts can provide a false sense of financial security and result in excessive or irresponsible spending habits. 

You should carefully consider the potential unintended consequences of gifting. Luckily, most negative effects can be mitigated by working with an experienced estate planning attorney who can create a strategic plan to leave an inheritance while avoiding potential pitfalls of gifting.

If you would like to gift money or property to your grandchildren in a way that is protected and has a lasting impact, give us a call so we can help you plan the perfect approach.

Help Your Clients Celebrate the Upcoming Holidays with an Up-to-Date Estate Plan

National Grandparents Day: Three Things to Consider Before Your Clients Make a Gift to Their Grandchild

Grandparents often love the opportunity to shower their grandchildren with gifts. In most cases, these gifts are given on holidays and birthdays and commonly consist of an item that may have been at the top of their grandchild’s wish list. However, as you are discussing your client’s financial plans for the future, it is not uncommon for those plans to include the desire to leave more substantial gifts to their grandchildren. Christmas and birthday gifts can leave lasting impressions on grandchildren, but some grandparents seek to provide more substantial gifts that may assist their grandchildren in building their savings account, furthering their education, or purchasing their first home, to name just a few. Here are some often overlooked considerations to assist you in guiding your clients and analyzing the important details of making a gift. 

  1. When do they want to make the gift?  

The initial and crucial discussion with your clients should revolve around determining the ideal timing for gifting to their grandchildren. Various factors can influence your clients’ decisions regarding when to leave a gift. If their grandchildren are slightly older and considering college, your clients might consider gifting them funds to support their chosen educational path. Similarly, if they have adult grandchildren who are on the verge of buying a home, planning a wedding, or expecting their first child, this could prompt your clients to offer a monetary gift sooner rather than later to assist during these significant life moments. The act of giving a gift during their lifetime enables your clients to witness the profound impact it can have on the recipients, which can be exceptionally fulfilling. 

While gifting during one’s lifetime certainly has its advantages, gifts given after your client has passed away, in the form of an inheritance, can carry equal significance. For younger grandchildren, planning for their postsecondary education, purchasing their first home, or starting their own business may be in the distant future. In cases such as these, your clients may feel more comfortable leaving money to their grandchildren at their death since the need is not immediate. Ultimately, your clients’ goal may be to provide their grandchildren with a gift at death that provides them with future assistance and leaves them with a lasting memory of their love and generosity. 

  1. Can they afford to leave a gift to them?  

As a trusted financial advisor, your role often involves assisting clients in creating long-term financial plans to achieve their goals while considering the ever-changing cost of living. In this process, you may need to inform clients that some of their aspirational financial gifts may not be feasible given their current financial situation.

When clients express the desire to leave a gift to their grandchildren, your responsibility is to help them determine if it is financially viable. Planning for aging clients requires careful consideration and discussion of potential costs for future care, especially if they might require substantial or institutionalized medical or long-term care. The Administration on Aging estimates that at least 70 percent of people who are 65 today will require care in some context. Notably, the national median annual costs for nursing home care in 2023 have risen to approximately $108,405 for a private room, compared to $92,376 in 2016. The average length of stay in long-term care is 3.2 years. Just over 20 percent of residents will require care for 5 years or longer. In the case of married clients, leaving gifts to grandchildren should be approached with caution, considering the potential needs of a surviving spouse who may rely on any remaining funds to support themselves.

While clients may have the noble intention of providing their grandchildren with financial gifts either during their lifetime or after their passing, it may not always be practical or feasible based on their current and future financial circumstances. If clients are determined to make such gifts, it is advisable to recommend consultation with an experienced estate planning attorney. This way, a well-crafted plan can be developed to make the gift to grandchildren when the client is no longer living, if possible.

It is essential to educate clients about their options for gifting from a financial perspective, as some may have sufficient assets to make gifts during their lifetime or as part of their estate, while others may not. As a trusted advisor, your guidance can help clients make informed decisions about their financial future and the legacy they wish to leave behind.

  1. What impact will the gift have? 

Lastly, the best approach for ensuring that your clients understand the full impact of their gift is to discuss both the potential positive and negative aspects of gifting to grandchildren. Gifting to a grandchild and the gift’s subsequent impact may depend largely on your clients’ goals in making the gift. As it is, giving grandchildren monetary gifts can accomplish the goal of providing opportunities that may not have been available to your clients in their youth. Ultimately these gifts can create a profound and lasting impact on their grandchildren’s future. 

On the other hand, depending on how the gift is structured, it could impact the grandchild’s ability to receive assistance with education by impacting the assets required to be listed on their Free Application for Federal Student Aid (FAFSA). In some cases, providing a large sum of money to a child or young adult can have the negative consequence of disincentivizing them to obtain or maintain employment or work toward a higher education. It could also result in excessive or irresponsible spending habits. You should advise your clients that the negative side effects can often be mitigated by working with an experienced estate planning attorney who can create a strategic plan to leave an inheritance while avoiding potential pitfalls. 

If you have clients who are looking for ways to gift money or property to their grandchildren and would like to discuss different ways to plan and execute those gifts, give us a call.