FINANCIAL WELL-BEING WITH ESTATE PLANNING

FINANCIAL WELL-BEING WITH ESTATE PLANNING

With the help of an estate attorney you can articulate and document your wishes and your estate may be able to avoid the costly, time consuming probate process.

There are many advantages of Estate Planning which impact financial well-being include providing guardianship for minor children, minimizing taxes, and planning for incapacity.  Additionally, when a person passes away, most of their property, like real estate or financial assets, becomes subject to probate. My own estate attorney, Roberta Clark, now retired, used to repeatedly say, “plan your estate before it’s too late”.  Robbie and I were in a networking group together and she constantly  drilled this important concept into all members.  She was  careful to ensure we understood, estate planning can have a big impact both in life and after death.  

Estate attorney, Andrew Wertheim of Pacific Estate Planning says, “If you have a child, own a business, or own a house – it’s time for an estate plan.  Why?  An estate plan allows you to nominate guardians for your children so they will have no trouble enrolling in school or receiving non-emergency medical care from their doctors, it can keep your business running smoothly should you get sick or injured, and, of course, an estate plan can save money by avoiding probate”.

Guardianship and Conservatorship

In the event something was to happen to a parent, a guardian would provide care for the minor child or children like making living arrangements and seeing to their general well-being.  They would also be tasked with the financial aspect of care; such as, making financial provisions for healthcare, education, and maintenance.  With appropriate estate planning in place, the grantor (person who’s financial estate and minor children belong) can proactively choose the guardian for their minors instead of having this left to the decision of the courts.  

A conservator is appointed by the courts to manage the affairs and personal maintenance of an at-risk adult (think Britney Spears or someone challenged by Alzheimer’s).  Conservatorship proceedings can cost upwards of $20,000!  Consider a senior who has not sought the counsel of an estate planner and who holds no estate documentation like advanced health care directives or durable power of attorney for finance.  If this person were to develop Alzheimer’s, their family may have to spend upwards of $20,000 in court to have a public proceeding to determine need for the legal care or conservatorship.  However, if they have proper estate documentation in place, in advance of decline they make the choices for themselves about who and how care can be administered and how their assets are used for their benefit.  

Power of Attorney for Healthcare & Finance

During your lifetime, Powers of Attorney (POA) for Healthcare and Finance can be used to allow another person, a trusted friend, family member, or professional fiduciary to act on your behalf and in your best interest.  If you were in an auto accident and became incapacitated, your POA for Healthcare allows this trusted person to make decisions about your healthcare like accepting or rejecting treatments and stipulating who has access your your medical records, even if you can no longer speak for yourself. Your POA for Finance (who may or may not be the same person as POA for healthcare, this choice is yours) will be able to access your financial accounts to pay your bills if you are not able to do so on your own.  When you set up estate documents like POA for health and finance you can grant your trusted representative restricted or broad scope authority (again the choice is yours), but you must do this before you become incapacitated, it can not be done once you are no longer of sound mind.  

Probate

After you pass away, your Will provides survivors with details about your asset distribution wishes and your Trust allows title of your assets to transfer without the need of Probate.  Why should you care about how your assets transfer after you pass?  Probate is a very costly, time consuming, public knowledge process.  Did you know Probate fees are based on your gross estate not net.  Consider this staggering example, if your home is worth $600,000 and you still owe $450,000 on your mortgage, the probate fees will be based on the $600,000 value (gross) not the $150,000 equity (net) you have in the home!  In other words probate will potentially cost  $30,000. Click here to check out a powerful Probate Fee Calculator provided complimentary by Pacific Estate Planning .  If on the other hand your home is titled properly in the name of your Trust and you have stipulated in your Will that the home is to go to your children, it passes to the kids without going through the invasive and costly probate process and isn’t this what you really wanted?

Conclusion

Estate planning is an essential part of overall financial planning.  You will be able to make arrangements in case you become incapacitated, or pass away.  It’s an opportunity to make your wishes known for protection of your minor children, plan for a business, and potentially avoid probate.  You have choices, but you can only make these choices while you are mentally capable and alive!  Don’t delay, contact an estate attorney today. 

About the Author

Author, Marianne Martini Nolte, Certified Financial Planner ™ practitioner, provides fee-only, fiduciary, independent financial services.  Her firm, IMAGINE FINANCIAL SERVICES (IFS) is a registered investment advisor offering advisory services in the State of California and in other jurisdictions where exempted.  Marianne’s focus is serving Women and Young Professionals from generations X, Y, and Z.  This article is intended as a high level view.  

All written content is for information purposes only. Opinions expressed herein are solely those of IFS, unless otherwise specifically cited.  Material presented is believed to be from reliable sources and no representations are made by our firm as to other parties’ informational accuracy or completeness. 

For more in depth information, please reach out:

Marianne Martini Nolte, CFP®

Imagine Financial Services 

Website, www.imaginefinancialservices.com  

Email, mnolte@imaginefinancialservices.com

Phone, (760) 472-5155

REFERENCES

Andrew Wertheim, Pacific Estate Planning, interview May 2, 2021. https://pacificestateplanning.com/contact/