How to Align Insurance with Your Estate Plan

How to Align Insurance with Your Estate Plan

If you’re like most folks, you use a variety of insurance products to manage risk and protect you, your family, and your assets from losses caused by property damage, businesses, property, accidents, disability, retirement, and death. However, instead of considering these insurances as separate items, we suggest you make them part of an integrated, overall risk management plan.

Different Kinds of Insurance for Different Risks

Most insurance can be grouped in these general categories.

Property and Casualty Insurances: This would include insurance on automobiles and other vehicles, home, furnishings, jewelry, and artwork – and personal liability insurance, including umbrella insurance.

Business Insurances: Business owners need insurance on buildings they own, office equipment and computers as well as liability, worker’s compensation, errors and omissions, and business interruption insurances.

Health and Disability Insurances: Disability income insurance replaces part of your income if you become ill or injured and unable to work. Health insurance helps to pay for medical services received and long-term care insurance helps to pay for extended care that is not covered by most health insurances or Medicare.

Retirement Insurances: Annuities and other insurance products can help replace income after retirement.

Estate Planning Insurances: Life insurance is often used to replace an earner’s income; pay funeral expenses, debts and taxes; fund family and charitable trusts; fund a business buyout and compensate the surviving owner’s family; provide an inheritance; and equalize inheritances for family members who do not work in a family business.

What You Need to Know About Insurance

Remember, insurance is for risk management — to protect you, your loved ones, and your assets from potential areas of loss. If a risk is no longer there (the exposure ends or you are able to self-insure and cover the risk yourself), then the insurance coverage for that risk can be eliminated.

Actions to Consider

Trying to coordinate your own insurances and manage risks yourself is a daunting task. Instead, we suggest you work with a team of advisors who have the knowledge and experience to help you make sure your risks are covered at the appropriate levels, without duplication and unnecessary costs.

An advisory team usually includes your financial investment advisor; estate planning attorney; life, health and property/casualty insurance agent(s); and a CPA. Other members may be added to your team as needed. You will probably find that your advisors will welcome the opportunity to work on your team, because they want to provide you and your family with the best possible service and solutions.

We’re happy to connect you with the experts you need or work with the experts you already have in place.

3 Reasons You May Want to Avoid Probate

3 Reasons You May Want to Avoid Probate

When you pass away, your family may need to visit a probate court in order to claim their inheritance. This can happen if you own property (like a house, car, bank account, investment account, or other asset) in only your name. Although having a will is a good basic form of planning, a will does not avoid probate. Instead, a will simply lets you inform the probate court of your wishes – your family still has to go through the probate process to make those wishes legal.


Estate Planning for Unmarried Partners

Estate Planning for Unmarried Partners

When you’re in a romantic partnership – as opposed to a marriage – you need to create the legal protections and benefits automatically afforded to those who are married. For example, married persons legally inherit from each automatically and can visit their spouses in the hospital without question. You and your partner can do the same, but only if you have the legal documents that create those rights.

Estate Planning is Your Legal Instruction Book

If we sat down and chatted right now, you’d likely say, “Yes, of course, I want my partner to have the house if I die” and “Yes, I want my partner to make healthcare decisions for me if I cannot make those decisions myself.”

We need to transform your wishes into legal documents. The easiest way to make sense of estate planning documents is to think of them as an instruction book.

Your Estate Planning Avoids the State Default Plan

In a way, everyone has an estate plan. For those who haven’t created an estate plan themselves, the state has a default plan – and – it’s not what you would likely want. For example, assets you own in your individual name go through the probate court process and are given to your closest legally recognized family members. An unmarried partner is not a legally recognized relationship, meaning your partner will not receive any of those assets – or be on a list of folks who can make healthcare decisions on your behalf.

Let’s Continue This Conversation

Let’s sit down and talk through your goals, assets, and family situation. We’ll talk about who is best suited to help you with medical and financial decisions if you cannot make those decisions yourself. And, we’ll also chat about guardians for minor children, avoiding probate, minimizing taxes and fees, creating a legacy, and protecting you and your loved ones.

Is a Financial Plan Enough?

Is a Financial Plan Enough?

Why Experts Say You Need an Estate Plan, Too

If you want to leave a robust financial legacy for your family, a financial plan alone is like trying to guide a boat with just one oar. It’s only part of the big picture for your overall monetary health. A well-informed financial plan is worth your time for several reasons, but let’s look at how financial and estate planning can work in tandem to create the best possible future for you and your family in the years to come:

What’s included in a financial plan

Financial planners take stock of an individual’s fiscal landscape and come up with approaches to maximize his or her overall financial well-being. Take Emily for instance, an energetic project manager in her late-twenties. She’s found a successful career track after graduating with her bachelor’s and now has the steady income necessary to start daydreaming about buying a house with bay windows like the one she passes on her morning commute.

But before she can take such a big leap, Emily tracks down a skilled financial planner who will take an honest look at her foreseeable cash flow and her spending and saving habits. People from all walks of life use the help of financial planners to make sure they’re in good shape for making big purchases, saving for their children’s education, and ensuring a comfortable retirement. This also includes developing an investment portfolio, which the financial planner monitors and manages.

But financial planning only goes so far. To have a comprehensive approach, Emily also must also consider her estate and the wills and trusts she should put in place so her assets go where she wants them to in the long run. That’s where a trusts and estates attorney comes in.

What’s included in an estate plan

Estate planning attorneys are lawyers who give sound advice about what will happen to a person’s assets if he or she becomes mentally incapacitated or when he or she dies. While this may not sound like the sunniest of topics, knowing that what you pass on to your family will be legally protected lets you focus on enjoying the best things in life without worrying about your loved ones’ futures. Estate planning includes defining how you want your loved ones to benefit from the financial legacy you leave behind, implementing tactics to protect your assets from creditors down the road, providing a framework so your loved ones can make medical decisions on your behalf when you can’t, developing strategies to help you reduce estate taxes, and more.

And at the end of the day, your attorney is a teacher. He or she should be equipped to clearly explain your legal options. Even though estate planning can be highly technical, your professional bond with your attorney can and should feel like a friendly partnership since it involves taking an honest look at many personal wishes and priorities. There is no one-size-fits-all estate plan, so choose an attorney whom you trust and enjoy working with and who is responsive to questions and needs.

Remember Emily? While financial planning helped her get from point A to point B with some pretty big money milestones, she now knows she needs an estates and trusts attorney to make sure her wishes are carried out and her money stays in the right hands—her family’s.

How these two efforts work together

There are several ways these two components of your financial wellness work in harmony. Asking your financial planner and estate planning attorney to collaborate is common practice, so don’t be concerned that what you’re asking is outside their regular scope of work. Knowing who else advises you will help both parties get the information they need do their jobs at peak effectiveness. For example, your estate planning attorney may prepare a living trust for you, but your financial planner may help you transfer certain assets into that trust.

What are you waiting for?

If you already have a financial planner and are thinking about working with a trusts and estates attorney, you’re in an excellent position. We can often collaborate with your advisor to begin working on your estate plan. This might save you time and money, as we’ll get up to speed with the help of your financial planner.

The right time to plan your estate is right now. The sooner you put yourself and your family in a position to rest easy knowing a solid plan is in place, the better. And now that you know your financial plan is a wonderful start—but not a complete solution—you’re ready to take the first step on the path to total financial security.


5 Things Every New Mother Needs to Know About Wills

img-family15 Things Every New Mother Needs to Know About Wills

As a new mother, you naturally want to ensure your new baby’s future in every way. For many new mothers, infancy is a time for celebrating new life, and making a will is the last thing on their minds. For others, the process of bringing new life into the world sparks intense feelings of wanting control and needing organization. Regardless of where you fall on that spectrum, you might be struggling to figure out what steps you need to take to protect your children’s future should the unthinkable happen. Here are five key things every new mother should know about wills.


Want to Give the Kids an Early Inheritance? 4 Things to Consider

Want to Give the Kids an Early Inheritance? 4 Things to Consider

If you’re thinking about giving your children their inheritance early, you’re not alone. A recent Merrill Lynch study suggests that these days, nearly two-thirds of people over the age of 50 would rather pass their assets to the children early than make them wait until the will is read. It can be especially satisfying to fund our children’s dreams while we’re alive to enjoy them, and there’s no real financial penalty for doing so, provided that you structure the arrangement correctly. Here are four important factors to take into account when planning to give an early inheritance.


Stress Test Your Estate Plan

So you’ve done the hard work of establishing an estate plan. Good on you, as they say across the Pond. However, you still have serious work to do to ensure that the strategy you’ve selected will maximize your peace of mind and protect your legacy.

Estate plans are living, breathing creations. Your life can and will change due to new births, children getting older and other shifts in the family; changes to your portfolio, career and business; and changes to your health, where you live and your core values. Likewise, external events, such as tax legislation passed in your state or the development of a novel financial instrument, can throw your plan off track or open the door to opportunities.


What To Do When a Disability Throws Your Estate Plan Into Chaos

What To Do When a Disability Throws Your Estate Plan Into Chaos

As poet Robert Burns mused centuries ago, “The best-laid plans of mice and men often go awry.” Despite thoughtful effort and a concerted strategy, you cannot prepare for every emergency. A car accident, sudden illness, workplace injury or chronic medical condition can force you to re-evaluate the core assumptions you used to plan your future and set up your legacy.


How Will Brexit Impact Your Financial Planning?

 How Will Brexit Impact Your Financial Planning?

Market volatility is a constant in our modern world. But so-called Black Swan events sometimes take the concept of volatility to the next level. On June 23, voters in the U.K. passed a referendum supporting the idea that Britain should leave the European Union. Known as “Brexit” for short, this surprising political outcome instantly plunged international markets into crisis, and the British pound took a beating.

Prior to the Brexit vote, Wall Street was already somewhat destabilized and reeling due to an abnormal political season in the U.S. and several other factors. And since the vote, the immediate future is looking anything but placid.

So what are the implications for the average U.S. investor? Will Brexit (and all the other turmoil we see in the news, like the horrific attacks in Nice, Istanbul, and elsewhere) somehow impact your estate planning or long-term financial strategy? If so, how should you react, if at all?

When big political events take over the headlines, they tend to give people the jitters regarding their portfolios and legal plans. Brexit is no exception. It didn’t take long for Twitter and Facebook to burn red hot after the vote and lead to speculation about Brexit’s ramifications and “quick fixes” for how to respond to these imagined scenarios. As serious as the situation is, however, you definitely do not want to overreact. Let’s all calm down and take a drink of water.

What Will Brexit Do to the Global Economy?

It’s difficult to say just what Brexit’s long-range effects will be. All we have right now is a vote to leave the European Union. Britain hasn’t started implementing that plan yet. The best we can say at this point is there is a fair level of uncertainty in the markets stemming from this unexpected vote.

Many analysts predict a recession in the UK, should the country actually pull out of the EU. If that happens, it will likely spill over into the rest of Europe, and probably lead to some ripples globally. But that negative forecast would only happen once implementation gets underway—12 – 24 months out. And, just because there’s a recession in Europe doesn’t necessarily mean it’ll travel across the Atlantic to the U.S.

At this point, investment managers are keeping their eyes on the opportunities. A recession doesn’t necessarily spell doom and gloom, and even the prospect of one shouldn’t lead to a radical overhaul (or even small amendments) to your particular investment, legal, and estate plan. Bear in mind the following:

  • Overreacting to big picture financial news can be as bad as or worse than doing nothing at all.
  • What’s happening in the global marketplace is out of your control; you just need to manage your business, money, and legal affairs.
  • By getting clarity about your long-term plan and developing contingencies for different financial events, you can feel more at ease.
  • There’s even a chance that the Brexit won’t actually happen, so overreacting might even be wasted effort.

Here’s the bottom line: Keep a cool head. Work with us and the rest of your legal and financial team to adopt a strategy that achieves your goals. We are here to protect your future. Give us a call today.

Long-Term Care Planning, Part 1: A Central Requirement

Long-Term Care Planning, Part 1: A Central Requirement

Health care has been the topic of discussion lately, but the greatest threat to your financial health is long-term care. This is the kind of care you need if you are not able to perform normal daily activities (such as eating, dressing, bathing and toileting) without help, and it is expected that you will need this help for an extended period of time, often for the rest of your life.

Long-term care is often needed due to aging, chronic illness or injury, and with people living longer, most of us will need it for at least some time before we die. But it is not just for the elderly–a good number of younger, working-age adults are currently receiving long-term care due to accident, illness or injury.

The Key Takeaways
o The cost of long-term care is the greatest threat to your financial health.
o Most of us will need long-term care for at least some time before we die.
o It is better to assume you will need long-term care and plan for it than to just hope it doesn’t happen to you or a family member.

The Expense of Long-Term Care
Long-term care can be provided in your home, in an assisted living facility or in a nursing home. All can become very expensive over time.

For example, home health care can easily run over $28,000 per year–that’s at $22 per hour for just 25 hours per week. Depending on the skill required, number of hours needed and where you live, it can cost considerably more.

Assisted living facilities can cost more than $60,000 per year. Here, everything is a la carte–the more services you need, the higher the cost. Nursing home facilities, with round-the-clock care, can cost more than $120,000 a year.

Costs for long-term care are hard to estimate. The average stay in a nursing home is three years; patients with Alzheimer’s usually need care longer, often in specialized facilities. Again, the actual costs will depend on the kind of care you need, how long you require it and where you live. Expect these costs to increase as the cost of medical care, in general, continues to rise.

What You Need to Know: Long-term care expenses are not covered by health insurance, disability income insurance or Medicare. If you do not plan for these costs, and you or another family member requires long-term care, the results can be financially devastating for your family.

Actions to Consider
o Find out what costs are for long-term care in your area. Your financial and/or insurance advisor will be able to give you some parameters. You can also ask friends and neighbors; you probably know someone who has a family member receiving care at home or in a facility.
o Have an honest discussion with your spouse (and possibly other family members) about these costs and your desires about long-term care, should you need it. Most people want to stay in their homes. Find out what it would cost to make that happen–renovations to your home, home health care, etc.
o The next step is to start planning how to handle these costs, which will be addressed in Part 2.