The 4 Pillars of Estate Planning

Presented by Marc Aarons

I wanted to quickly touch base with you regarding your estate planning, which is easy to overlook but incredibly important.

While an estate attorney should be your primary resource on this topic, I see these oversights financially impact my clients so often that I wanted to be sure I shared some guidance. As always, I’m here to answer any questions you may have.

1. Beneficiary Designations and Updates

Make sure your beneficiaries are up to date on your financial accounts. These can include brokerage accounts, IRAs, life insurance policies, bank accounts, and more. Consult with your attorney about ways to transfer accounts to your beneficiaries (known as TOD – Transfer on Death) – this could enable funds to skip the probate process. Moreover, updating your beneficiaries will ensure that your assets are distributed to the right people later on. While your will may name certain people, be sure that your beneficiaries are updated on your investment accounts to avoid confusion down the road. Again, consult with your attorney for your estate plan, but please reach out to me if you would like to make a beneficiary designation or update with your account(s) on file with us.

2. Financial Power of Attorney

If you become incapacitated or unable to handle your affairs, having a durable financial power of attorney can help. It will ensure that the person of your choice has the authority to act on your behalf. Consult with your attorney to ensure your plan is in place.

3. Take Inventory of Your Assets

Regardless of how much you think you have, it is a valuable financial exercise to take an inventory. You can start by looking around your house–it may be surprising when you tally up the total of your finds! During the process, some things to consider are your primary residence, other properties, collectibles, art, coins, vehicles, boats, and any other valuable, tangible possessions.

Next, consider the intangibles. These can include life insurance policies, retirement accounts (RA, 401(k)s, 403(b)s, SEP IRAs, pensions, etc.), checking accounts, savings accounts, stocks, bonds, mutual funds, health savings accounts, and more.

Once you have all of these things accounted for, it’s time to put a value on them. You can do so for things like real estate or coin collections by ordering appraisals. At a minimum, do your research so that you can have an approximate value on each asset. By doing so, you can obtain peace of mind knowing that your assets will be distributed according to your wishes.

After you have a complete inventory of your assets, you should make sure that your documents are well-organized and stored securely. These documents include insurance policies, deeds to real estate, titles to vehicles, boats, wills, trusts, bank account information, retirement account information, safety deposit boxes, debt statements, funeral plans, and anything else relevant to your situation.

4. Consult with an Attorney

Estates come in all different sizes. Regardless of the size of your estate, consulting with an estate attorney is always suggested. At a minimum, consulting with a tax professional can provide value. Taking these steps can alleviate any doubts you may have about the probate process, taxation, or distribution of your assets. An estate attorney can help you create a plan or determine if your planning is adequate for your circumstances.

Living trusts, your will, revocable trusts, business succession arrangements, inherited properties of minors, and POAs are all additional things that you should discuss with your attorney. If your estate is on the smaller side, or if you are young, there are online tools that can help guide you through the process at little cost and provide you with peace of mind.

It is never too early or too late in life to make these prudent financial arrangements!

If you need to verify or update the beneficiaries on the accounts you have with us, please feel free to reach out to me. This message is for informational purposes only and is not legal advice or opinion. Consult with an attorney for your estate planning needs. As always, I am here when you need me.

Marc Aarons may be reached at 714-887-8000 or marc@ocmoneymanagers.com

www.ocmoneymanagers.com

This communication is from Money Managers, Inc.; a Securities and Exchange Commission registered investment advisor.  Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities, and past performance is not indicative of future results.  Investments involve risk and are not guaranteed.  Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed here.