The best estate planning begins early and is adjusted when major life transitions occur (marriage, new family, divorce, death, etc). Coordinating financial planning with estate planning is important, because what you do financially today can have a direct impact on the estate your heirs will receive. Here are some steps to consider:
n Start with a financial planner: Get a baseline look at your finances before you begin. A professional can review strategies to achieve your goals and give you tools to protect your assets and loved ones if you die suddenly.
n Talk with an estate attorney: Don’t use a software package to draft your estate plan! The long-range costs could be much greater without experienced advice tailored to your needs. It’s usually a good idea to revisit your estate plan every five years.
n Consider guardianship for your kids: If you die suddenly or are incapacitated, have a guardianship plan for the care of your minor children. Ask your proposed guardians before you name them, give them guidance on how you would want your kids raised and consider naming a separate individual to manage your assets for the benefit of your children. A trust created by your will upon your death can be an efficient legal structure for managing and distributing those assets.
n Plan for special needs kids: If you have a disabled child who is expected to need lifetime assistance, consult a qualified attorney to create a special needs trust. It will help protect your child from having to give up any public financial assistance or access to special medical help that could be withdrawn if they were to personally inherit assets that would disqualify them for these programs. Assets held in a properly designed special needs trust are not counted as the child’s assets. Trust assets may still be used to support their housing or living needs.
n Get insurance protection: If you have dependents, consider purchasing adequate life insurance to benefit your family, but make sure you also have adequate health, property/casualty and disability insurance. This is especially true if you’re newly single with kids. A qualified financial planner should be able to review those options.
n Review all investments for primary ownership and beneficiary information: Appropriate titling of your assets can provide legal, tax and asset protection advantages. Post-divorce, or if you are widowed, review that asset ownership and beneficiary designations have been properly updated on your assets.
n Activate trusts and other estate transfer mechanisms: It is surprising how often estate attorneys and advisers fail to help their clients actually title their assets in the name of living trusts and other mechanisms to transfer wealth. It’s not enough to sign legal documents — get step-by-step instruction on what should be done to make them effective.
n Make sure your representatives know your wishes: As soon as someone agrees to be your health or financial representative, go over your wishes and legal documents with them, so they have the information they need to truly represent you.
Karin Grablin, a professional financial planner, is with Dictor | Martin in Sarasota. She can be reached at 906-7222 or www.dictormartin.com.