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3. Estate Planning

Legacy Planning – The Basic Documents of Estate Planning and Beyond

by Fern Alix LaRocca

in 3. Estate Planning

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The third step in your do it yourself financial plan is estate planning. Estate planning is thought about as wills, trusts, and gifts, etc. Not anymore. No one wants to think of sickness, old age, and death, yet all of us will experience that at some point, and the most important element of a person’s legacy is not money but passing along values and life lessons. Yes, the basic documents of an estate plan which are needed to build wealth are a will, durable power of attorney for financial care and durable power of attorney for health care. But now people want so much more. They want to know how the final wishes and preserved memories of the individual will be left behind. Here is the new softer side of estate planning:

Ethical Wills-more people are using this type of will not just to distribute assets but to also put their values and beliefs on paper. Even if you are not the best writer, you can find outlines and examples on the web to get you started on what memories, beliefs, values, or life lessons you would like to leave behind.

Durable Power of Attorney for Financial Care is a document that gives someone the authority to take over your financial matters upon your disability or incapacity. Make sure that the individual you choose is aware of his or her duties. I have found too often that one child who is not financially savvy is given the responsibility that he or she did not want. Don’t surprise people with this responsibility. Talk to them first to see if they are open to being appointed for these duties.

Durable Power of Attorney for Health Care is a document that gives someone the authority to make medical decisions for you upon your disability or incapacity. 85% of most DNRs (do not resuscitate) are not honored. Again, make sure the individual you choose knows of his/her obligation to see that your wishes are honored.

Some of the new advanced medical directives like the Five Wishes available at Aging with Dignity offer a more detailed medical directive which is easy to understand and use.

Passing along “values and life lessons” was overwhelmingly considered (by over 75 percent) the most important element of a person’s legacy according to a recent study. Don’t wait to execute these documents under duress. Plan your legacy today for the protection of your assets and your family.

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Do-It-Yourself Financial Plan Step #3 Estate Planning

by Fern

in 3. Estate Planning

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Do-It-Yourself Financial Plan Step #3 Estate planning is not just for the dying. Wills, trusts, powers of attorneys, medical directives, etc- sounds so awful. But consider that if something were to happen to you and your spouse, a judge would say who your children would go to live with. Or without a corrected beneficiary designation, an ex-spouse could get insurance  proceeds upon death. Your family could keep you leaving like a vegetable in a nursing home against your wishes because you didn’t have a clear Do Not Resuscitate (DNR) on file.

Don’t even get me started on what will happen to your investments without an estate plan.  Kiss that investment plan goodbye.

At the very least, you and your spouse should have written wills. If you can’t afford an attorney, look through my resources for do-it-yourself options. Beware though that each state has unique twists so make sure your will is federal and state compliant.

Estate planning isn’t for the dying. It is for the living. It is part of a firm financial foundation that is a necessity before you start to invest. Secure your foundation with steps #1-3.

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Most Estate Plans Possess a Major Flaw

by Fern Alix LaRocca

in 3. Estate Planning

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Most Estate Plans Possess a Major Flaw-Why Your Family’s Future is at Significant Risk

If you could look 50 years into the future and visualize a gathering of your family, what would you like to see going on and what would you like to hear them talking about? Most people say they would like to see their loved ones healthy, successful, in good relationships, among family and living a life that reflects the values they instilled in them throughout their lifetime. Ironically, people who share this belief rarely, if ever make provisions in their estate plan to support these outcomes. The absence of addressing this desired outcome is a major flaw in planning.

Traditional estate planning, while a critical component to any comprehensive financial plan to build wealth, only addresses your material assets, possessions of financial value, and your wishes for how they will be disbursed in the event you pass away or cannot communicate for yourself. Clearly we amass more in life than material possessions. And the legacy we leave would be incomplete if these are all we’ve made provisions for. While the efficient distribution of material possessions and the common understanding of one’s preferred medical orders is incredibly important, there is still a huge void if you have not shared information to support your desire to leave a meaningful legacy — to assure your loved ones will enjoy the experiences you envision for them in fifty years. Simply put, the absence of a “personal legacy plan” is a critical flaw in most estate plans.

There are two explanations for the irrational disconnect between such universal desires and the absence of common sense provisions in so many estate plans:
First, in our culture it’s hard for people to think about, let alone talk about, their family going on without them. It’s also hard for people to talk about their deepest emotions, core beliefs and personal values. And these are all essential components of a meaningful legacy plan.

Second, while the legal and financial services industries have developed strategies and products to address much of this first hurdle in terms of financial planning, they have never possessed the training and tools required to assist them in the delivery of such a service in regard to non-material assets.

The good news is that the landscape is changing. Having survived the tragedies of 911, Katrina, modern warfare and even the recent stock market crash, America’s awareness of life’s preciousness has increased.

Even President Obama spoke to it last year in his opening remarks to the Business Council at the White House the morning after a tragic airplane crash in Buffalo, NY that killed 50 people. “Tragic events such as these remind us of the fragility of life and the value of every single day,” the president said.

At the same time, the financial services industry, and to a smaller extent the legal community, are also evolving in response to an aging baby boomer population. Specialized legacy planning services are emerging that ensure one’s personal beliefs and values will be clearly left to those we care about. Through these programs financial and legal professionals can offer their clients the peace of mind that goes far beyond
traditional financial and estate planning.

The time for needed change in estate planning has arrived. The public is ready to talk about the issues that matter to them. The critical tools for professionals to have meaningful conversations about legacy plans have arrived. It’s thankfully only a matter of time before “let’s review the legacy plan” becomes as common an expression after someone’s passing as, “we’re going to read the will” and “what does it say in then estate
plan.” That time could be today. You can help ensure the vision you have for your family fifty years from now actually comes true. You have a way to influence more than just the financial future of those you care about. Review your own estate plan and make sure it includes the complete legacy you want to leave behind.

By Mark Colgan, CFP http://www.planyourlegacy.com

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