What is an Estate?
When people hear the word “estate,” they sometimes assume estate planning is only for people with substantial wealth. In reality, your estate is simply what you own and the interests you have accumulated during your lifetime. This may include the money, property, and possessions a person owns, including real estate, automobiles, savings and investments, life insurance, retirement funds, valuables and heirlooms, and more.
When you die, or if you become unable to make decisions due to injury or illness, the government can determine what happens to your estate. When you have an estate plan, your estate is protected from government intervention. An estate plan eases the transition for your family and guarantees your wishes are carried out after death.
The Estate Planning Team
Without a team, your estate is at risk. You don’t get the full picture, which can lead to an unfinished estate plan and neglected assets. Estate planning becomes particularly important when you owns a business, has significant retirement or investment assets, owns real estate, has a blended family, wants to protect assets for children or grandchildren, or has tax and succession concerns.
With the right team of individual advisors working together to design your plan, you are better positioned to get the maximum benefit from your estate plan. Your team should include:
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Attorney: An estate attorney develops the legal structure of your plan. They can help you build the necessary estate plan documents such as wills, trusts, and establish beneficiaries and power of attorney. An attorney also ensures all documents are compliant with state law.
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Financial Advisor: For many clients, the financial advisor is an important part of the estate-planning process because a significant portion of the client’s wealth may be held in retirement accounts, brokerage accounts, life insurance products, or other assets that pass by beneficiary designation rather than through a will. Collaboration between your attorney and advisor is vital to avoid conflicts like outdated beneficiaries on retirement accounts and investment portfolios.
- Certified Public Accountant (CPA): Taxes associated with estate transfers can be a cumbersome burden on your family or business. A certified public accountant minimizes tax-related stress by properly valuing assets and ensuring compliance with state and federal tax law.
- An Insurance Professional: Life insurance may provide liquidity for a surviving spouse or family, help address estate or business obligations, equalize inheritances among children, or play a role in business succession planning. Other insurance coverage may become important when long-term care, disability, or liability risks are part of the client’s concerns. As with investment accounts, ownership and beneficiary designations matter. The insurance professional and estate planning attorney should therefore understand how a policy fits within the overall plan rather than treating it as a separate transaction.
- Family Members and Other Professionals: There are circumstances where discussing your plan with children or other family members can reduce confusion and help prepare the people who will eventually serve as trustee, executor, financial agent, or health-care agent. There are also circumstances where privacy is appropriate. That decision should depend upon the family and the plan. The same principle applies to physicians, care managers, social workers, business advisors, bankers, and other professionals. They should be involved when their knowledge or participation is relevant to your particular circumstances.
Communication Is What Makes the Team Work
The value of an estate-planning team does not come simply from putting several professionals around a conference table.
It comes from communication. The attorney needs to know what the financial advisor has recommended. The financial advisor should understand what the trust is intended to accomplish. The CPA should know when a contemplated transaction may have tax consequences. The insurance professional should understand how the beneficiary arrangement fits within the overall estate plan.
Most importantly, everyone needs to understand your objectives.
That is why estate planning should begin with a conversation rather than a stack of forms.
Begin Planning Your Estate Today
It’s never too early to build an estate plan. Clients who learn the value of comprehensive estate planning are more likely to rely upon and remain with their estate planning team.
At Gertsburg Licata, we work with clients and their financial, tax, insurance, and other professional advisors to develop estate plans based upon the client’s actual circumstances and objectives.
Contact Gertsburg Licata Co., LPA at (216) 573-6000 or on our website to start a conversation.
This article is intended for general informational purposes only and does not constitute legal advice. Asset protection strategies depend heavily upon individual circumstances, including the nature and timing of potential claims
