May 31, 2022 Weekly Update

We do love it when someone refers a family member or friend to us.  Sometimes the question is, “How can we introduce them to you?”   Well, there are multiple ways but a very easy way is to simply forward them a link to this webpage.

Here are this week’s items:

Portfolio Update:  Murs and I have recorded our portfolio update for May 31, 2022 

This Weeks Podcast -6 Considerations for Your Estate Plan

When it comes to estate planning, some things are essential and required at all times to simplify the process for your family when you’re no longer here.

Learn the purpose of having the durable and healthcare power of attorneys to make things simpler for your family in case you become incapacitated.


This Weeks Blog –6 Considerations for Your Estate Plan

Have you thought about your estate plan? If not, it’s a crucial element of retirement planning because it dictates how you’ll save and plan for the future. And even if you already have an estate plan in place, it can and will adapt and change over time.

6 Considerations for Your Estate Plan

Have you thought about your estate plan? If not, it’s a crucial element of retirement planning because it dictates how you’ll save and plan for the future. And even if you already have an estate plan in place, it can and will adapt and change over time.

In our most recent podcast, we walk you through six things to consider for your estate plan.

If you’re thinking, “I don’t need an estate plan,” you do. In fact, creating an estate plan is something that we recommend for all of our clients because they’ve worked hard during their lives and should have a say as to what happens to their estate when they pass on.

The six things that we recommend you consider for your estate plan are:

6 Considerations for Your Estate Plan

1. Will

Everyone needs a will, but why? A personal story I remember from school is that the #1 thing to do is to have a will. They drilled it into our heads that everyone needs a will. Why?

  • Wills dictate who gets what in an estate.
  • Wills dictate how assets get into someone else’s name.

In a will, you outline how your heirs will receive your assets and who gets what. If you don’t have a will, the courts will decide who gets what assets and how they receive them. Without a will, your assets may go to someone you don’t want.

Additionally, in 30 minutes or so, we can have most questions answered that populate your will and make your death much easier on your estate. Without a will, you’ll leave a mess for your estate and family that you leave behind.

2. Healthcare Power of Attorney

A power of attorney (POA) is someone who has the power over decisions. A healthcare POA can make decisions on your behalf while you’re alive. The individual steps in to make decisions for you if you’re unable to make them yourself.

For example, if you’re in a coma, this person could dictate your healthcare.

When you create a healthcare power of attorney, you can outline:

  • What care you would like
  • What care you reject
  • How someone can make decisions on your behalf

No one wants to be left with a decision that can impact their loved one’s life. When creating this document, you outline the care you would like and not like. Perhaps you don’t want to be on life support.

If you put in this document that you don’t want to be on life support, you’re saving someone else a lot of heartache because you’ve made the decision yourself.

It’s crucial to remember that a healthcare POA only allows the person to decide if you cannot make the choice for yourself. A stroke or brain damage are just two times when the person given power of attorney can step in and make decisions for you.

Everyone, even if you’re just turning 18, should have a healthcare POA because you just never know what the future holds.

3. Durable Power of Attorney

A durable power of attorney involves decisions outside of healthcare, such as:

  • Accessing retirement accounts
  • Writing checks for you
  • Controlling your finances and assets

The individual is acting in your interest, and you can outline how this individual may act. Perhaps you don’t want them to have the power to take money out of a retirement account.

If you have an IRA, you need to have a durable power of attorney in place. Why? An IRA is an individually held account. Your spouse has no right to access these accounts, even if you have a stroke and cannot access them yourself.

Instead, many IRAs will require you to have a durable power of attorney with them so that they can allow your spouse to access these funds.

4. HIPAA Form

HIPPA forms are for medical purposes, and they augment the healthcare power of attorney. The form allows access to your medical records. If you have a spouse or a child who needs access to your medical information, a HIPPA form is crucial.

Once your child turns 18, the hospital will not share your child’s medical information with you.

Filling out a HIPAA form allows someone access to your medical records so that they can know the status of your condition and how to make the best decisions on your behalf.

5. IRA/401(k) Beneficiaries

Your IRA and 401(k) have beneficiary forms that you ought to review annually. These beneficiaries are who will receive your assets upon your demise. Often, a person assumes that their will dictates who receives the assets.

However, there are more costs involved with a will than if you just added a beneficiary to your accounts.

Also, you can add:

  • Primary beneficiaries
  • Primary contingent beneficiaries
  • Secondary contingent beneficiaries

In this case, the funds go to the primary beneficiaries if they’re alive, then the contingent beneficiaries and then the secondary contingent beneficiaries if the other beneficiaries are no longer alive.

You can also add a charity or other entity as a beneficiary.

We recommend filling out a person’s full information, Social Security number and so forth. You can also leave money to a person, and if they’re no longer living, it will go to their heirs instead. Adding beneficiaries makes transferring these accounts much easier when you pass on.

6. Transfer on Death Brokerage and Bank Accounts

First, there are two types of accounts. Joint accounts are the easiest because if you have a joint account with someone and you die, the account becomes 100% their account. However, what happens if:

  • Both of you die at the same time?
  • You don’t have a person to have a joint account with?

A transfer on death or beneficiary is the easiest way to transfer these assets from your account to your heirs. Otherwise, the assets will be divided by the courts, which can take time and money in many cases.

Filling out a transfer on death makes it super simple for the person inheriting the account because they only need to fill out a form and supply your death certificate to receive the funds.

Yes, you can create your estate plan and add in a trust, but a trust is not an essential item of every estate plan. However, these six items above are the six that we believe are essential to an estate plan and must be included in every plan.

If you would like to learn more about estate plans, schedule a call with us today.

Don’t need help with an estate plan and want to begin securing your retirement? Sign up for our four-step course on securing your retirement.

How To Create an Estate Plan Without the Stress

Retirement planning is what we do on a daily basis, but there’s one thing we come across frequently that astounds us: people with millions of dollars in assets don’t have an estate plan. If you’re in this group or simply don’t have an estate plan in place, it’s time to start thinking about one.

No one wants to think about their demise, but it’s one of the certainties of life.

We had the opportunity to sit down with Andres Mazabel from Trust & Will* to discuss how to create an estate plan without stress. However, before we go into the process of estate planning, we must answer one fundamental question.

Why Do People Avoid Creating an Estate Plan?

We see many people, smart and wealthy people, who don’t have an estate plan. Even if you’re not a millionaire, an estate plan is a very beneficial tool to have in place. The main reason that people seem to overlook this tool is that they’re not educated on the importance of these plans.

In fact, most individuals don’t fully understand:

  • What an estate plan offers
  • What goes behind an estate plan
  • The options they have available
  • How to create an estate plan

Sure, we see many people just put off their plan until a later date because “they don’t have time,” but most people don’t have an estate plan because they don’t understand it and they’re expensive.

People don’t want to spend $2,000 to $5,000 (sometimes less, sometimes more) to create an estate plan.

Also, people don’t want to talk about death. Ironically, the pandemic has started to change this perspective because people are realizing that an estate plan helps ensure that a person’s family is taken care of upon their demise.

Probate can cost thousands of dollars and months of time if you pass without having these documents in place. 

Documents Everyone Should Have as Part of an Estate Plan

Estate plans aren’t just for the wealthy. In fact, even if you have minimal assets, you should still have an estate plan in place. A few of the many documents that should be part of your plan are:

  • Will-based plan. A will-based plan is the most basic form of an estate plan because it outlines the beneficiaries of your assets and the executor of your estate. You can also assign a legal guardian in your will who will be responsible for your child’s wellbeing.
    • Power of Attorney. If you’re incapacitated, a Power of Attorney will allow a person to make a decision on your behalf. 
    • Living Will or Healthcare Directive. Estate planning isn’t just about death. If you’re unable to make your own medical decisions, a living will can outline which medical intervention and procedures you want to take place. HIPPA authorization can also be created to allow a loved one to know about your health condition.
  • Trust-based. Many people will create a trust-based estate plan, especially if they have more assets. The plan allows you to dictate what happens to your estate and when. For example, you can distribute money to your child when they graduate college or reach a certain age.

Trying to secure your retirement is a good thing, but you need an estate plan to dictate what happens when you’re no longer here. You worked hard for all your assets, and an estate plan empowers you to leave these assets to others.

It’s crucial to understand that an estate plan evolves as your circumstances change. Your estate plan today will likely not be the same 10 years from now. Therefore, when you draft an estate plan, it’s crucial to update the plan throughout your lifetime.

Perhaps you don’t want your dear aunt Sally to become your child’s guardian anymore.

You can change that in your plan.

State Specific Estate Plan Updates

Every state has its own specific language that helps outline estate planning requirements. While the language doesn’t change much from one state to the next, you’ll want to have a local attorney overlook the plan for you if you do relocate.

Federal and state-specific changes may be made, and something as simple as a change of Power of Attorney form needs to be addressed.

For example, New York changed its Power of Attorney forms last year, so filling out the new form was a necessity for anyone who had an estate plan in place already.

Even if you haven’t moved states, you should have someone look over the plan every five years to ensure that it meets current requirements. Plus, your wishes may change, and a quick review can help you keep your wishes up to date.

How Long Does It Take to Create an Estate Plan?

Time is a major factor when creating an estate plan. Often, if you have all your documents and wishes available, you can complete the plan within a single visit to a lawyer. However, if you use a platform like Trust & Will, you can complete the estate plan in 30 to 45 minutes.

Trust & Will is the TurboTax of estate planning and allows you to create:

  • Trusts
  • Wills
  • More

And the platform has all the crucial documents that go into an estate plan mentioned previously in this article. Lawyers and additional help are provided through the platform if you need more assistance.

We use Trust & Will for our clients who are working on their retirement plans but don’t have an estate plan in place just yet. 

Of course, you can also go through your own lawyer to have your documents drafted.

The most crucial thing is that you sit down and really draft up your estate plan. Spending 45 minutes or less today can help save your estate months of hardship if your estate goes into probate because you didn’t have these documents in place.

If you haven’t already, we hope that you’re thinking about creating an estate plan today.

If you want to listen to other experts, we have professionals on our podcast every Monday.

Click here to listen to our podcast.