Your Estate Plan is connected to your Financial Plan

Before you meet with your estate planning attorney , you may consider that estate planning should be done in conjunction with financial planning. It also makes sense to connect the two. Why? Because you need to ensure your beneficiary designations are correct – you’ll also want to make sure that your assets are titled correctly.

Your estate plan should be a part of your financial plan because things change throughout the years. For example, you may have bought property. Or perhaps you’re in the process of getting divorced and need to overhaul your estate plan.

Keep reading to learn how your estate plan is connected to your financial plan. Be prepared!

How Your Estate Plan is Connected to Your Financial Plan

 When you connect your estate plan with your financial plan, you may discover that your cash flow and potential income tax benefits are impacted. It’s important to do thoughtful planning for you and your family’s future. Here’s what you should consider:

Beneficiary Designations

Have you reviewed your beneficiary designations on your assets lately? If not, you may want to meet with your financial planner. Also, consider if a beneficiary should predecease you. For example, if you leave assets to a child and he or she has passed away, some states will redistribute the money among the remaining siblings rather to that child’s heirs. Furthermore, if you got divorced, you may want to remove your ex-spouse as a beneficiary.

Ignoring Incapacity Planning

People are living longer which means an increase in longevity and mobility. You need to review or implement medical directives and durable powers of attorney  to ensure your healthcare wishes are honored and paid for in the event you enter an assisted living facility.

Planning for Aging Parents

Do you have aging parents? If so, your inheritance may not be as large as you expected or nothing at all. Furthermore, you may have to provide care and support for your parents. Many states are enacting “filial support statutes”  that could allow creditors to target children for the payment of their parent’s care. You may face criminal penalties for noncompliance.

Properly Titled Assets

Some couples want assets  to be titled jointly in the event one passes away before the other so the remaining spouse can take possession quickly and without complications or tax implications. Joint ownership meets these criteria, but it can get messy in the event of a divorce, second marriage; children from multiple marriages, adoption, and blended families. You may consider sole ownership (controlled by a will) or contractual, in trust.

The Cost of Complexity

You may be tempted to overlook financial estate planning because of the costs associated with it, from professional fees to valuation requirements. However, it’s imperative for you to plan your estate properly . If you don’t, you may discover that it may cost you or your loved ones more. For example, your estate may not have enough money to cover the taxes. So, you can either pay now or later. The choice is yours.

Review Your Estate Plan to Make Sure It’s Current

 Life happens, and it’s necessary for you to make sure your estate plan is connected to your financial plan. Most importantly, you need to develop a strong relationship with your attorney and financial planner. Why? Because it’s imperative that your estate and finances are secure.

If your estate planning attorney works hand-in-hand with your financial advisor, you’re one step ahead of everyone else. If you’re looking for an attorney and financial planner, consider the following:

• Conduct a background check to make sure an attorney and financial planner have the proper designations.
• Make sure both professionals have years of experience.

If you’d like more information about estate planning, click on over to the Client Education Center  and you’ll find worksheets, informational documents, and more