By Alex Weiss CFP® | President & Wealth Manager
When we talk about investing, tax planning, cashflow, and many other elements of your financial plan, we’re able to adjust our course based on how things go. Did you miss a tax planning opportunity this year? You can adjust course for next year (and upgrade your financial team).
There’s one area, however, that provides far less flexibility: estate planning. You have one chance to get that right, and there’s no time for learning from personal experience.
The only way to improve your estate planning strategy is to ask enough of the right questions and learn from the experiences of others. For your curiosity, here are a few of the most important questions we want clients to be asking through the estate planning process.
About Your Balance Sheet
The foundational question of estate planning is, “What do I own and how is it passed?” For more complex households, there are assets that need unique treatment in terms of how they’re packaged for a wealth transfer. We need individual strategies for unique assets that reflect:
- How they’re valued (like a business interest)
- How they’re taxed (both when it’s passed and beyond)
- How they’re managed (like a legacy vacation home)
- If ongoing governance is required (like charitable vehicles)
All of these things and more should be thoughtfully documented and have the proper trust structures in place. Almost all of our clients have assets that require unique trust strategies. There’s not a one-size-fit-all trust once you have more than cash, investments, and a house.
About Inheritors
Next to what you own, the next most important question is who will own it next. The ultimate goal is always to pass down wealth in a way that creates an enduring positive impact on our families. To do that, we need candid conversations around inheritors, their preferences, and their readiness.
- What does “fairness” look like and how do we promote family harmony?
- Are there things that matter more than equal money to my inheritors?
- Would I be doing them a disservice by giving them too much at once?
- Who has both the emotional intelligence and financial competency to be a trustee?
- Or, do we need to look outside our family to a professional trustee?
About Life Changes
One last critical area: shifts in circumstances. Everything changes–your balance sheet, your relationships, and seasons of life for you and your inheritors. Some changes may be obvious like selling a business or a second marriage. Others may require someone else on our financial team to help us pause, reflect, and survey our financial lives.
Do our earlier assumptions about inheritors and priorities still hold true? Without stirring up trouble, we need to keep our estate plan aligned to the current circumstances in our lives.
Reflect, Adapt, Preserve
The estate planning process is simple in concept:
- What do we want to happen with our estate?
- Do we have the legal vehicles in place to manage it?
- Do we have a process (or team) in place to make sure #1 and #2 stay aligned?
We’re here to do that for our clients with a process designed to create a fully integrated financial plan. Do you know others whose financial teams aren’t asking enough questions?
