Welcome to Estate Planning

A common misconception about Estate Planning is that it’s only for the extremely wealthy or those with complicated financial situations. Arguably, Estate Planning could be the first item to discuss when developing a financial plan. Appropriate estate plans help protect somebody’s financial interest and create tax-efficiency. Furthermore, these discussions can lessen the weight on your loved ones’ shoulders during emotional times and identify who would care for your minor children if something should happen to you prematurely. Of course, everyone’s situation is a bit different and there are unique circumstances with equally unique plans that fit those cases, but there are plenty of items that every individual should consider.

Beneficiary Designations. Although seemingly simple, designating beneficiaries on accounts can have a large impact on the overall estate plan. Beneficiary designations are specific to retirement accounts (IRAs, 401(k)s, 403(b)s, etc.) and allow you to identify who should receive each account in the event of death. Ultimately, these accounts avoid probate (the court settlement process), reducing the overall time and cost of transferring these assets. While “beneficiary designations” are specific to retirement accounts, most personal brokerage and bank accounts also allow for a “Transfer on Death” or “Payable on Death” designation to be added respectively, which act in the same manner.

Wills. Most people are familiar with wills being used to direct assets and other final wishes after death. Often this includes assets that do not have beneficiaries attached, such as individually owned properties, cars, and other intangible assets that must go through the probate settlement process. Regardless of financial complexity, another major purpose of a will is to identify who should become guardian(s) for any minor children. Without this, the final decision ends up in the hands of the state you live in, not always resulting in the desired outcome that the parents may have wished for.

Trusts. Trusts are viewed by many individuals as one of the more confusing parts of an estate plan. While not every financial situation requires a trust, it is important to understand the reasoning behind any potential need. Some benefits of a trust include tax-efficiency, extending financial control past death, creditor protection and privacy. Trusts can satisfy specific needs of the account holder and their heirs. At a broad level, trusts can be created in a permanent manner or in a form that allows for changes and amendments to be made down the road; with each having its own specific purpose. Determining the appropriateness of each form as well as identifying trusts designed for disability needs, non-citizen requirements, real estate, and a variety of other specific needs are good conversations to have sooner rather than later.

Advanced Directives. The umbrella of “advanced directives” includes Living Wills and Powers of Attorney. Different from a Last Will and Testament, Living Wills are the first line of defense for medical decisions. In the event that an individual is incapacitated or unable to make a coherent decision at the time of medical need, a Living Will would be used to understand his or her medical wishes. Unfortunately, we’ll never be able to predict everything that can happen in life, creating the need for a Health Care Power of Attorney; often referred to as a Health Care Proxy. This document allows you to appoint a trusted individual to make medical decisions on your behalf, in the event that you are unable to do so. Some situations may also call for Financial Powers of Attorney. This could be the result of memory issues, needing assistance with finances, or any other case where an individual would need to be appointed to have discretion over certain financial matters.

There are many benefits to having a sound financial plan, ranging from financial efficiency to emotional security. Having only scratched the surface of Estate Planning and the complexity within, it is important to have these conversations if you haven’t already. As financial planners, we can help you identify any gaps and outline steps to take in developing your plan. In the end, if a need for documents to be drafted or legal advice is identified, an estate planning attorney should be consulted.

As we embark on this clarifying journey together, I encourage you to submit any ideas, topics, or questions to The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendation for any individual.


This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation. Clarify Wealth Management and LPL Financial do not provide legal advice or services. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All investing involves risk including loss of principal. No strategy assures success or protects against loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss.