The 4 Crucial Estate Planning Questions To Answer

Estate planning should not be a complex process, but many people tend to make it so. Why?

One reason is Erratophobia (a word on my SAT’s), or the fear of making mistakes.

People with Erratophobia experience anxiety and other unpleasant symptoms. To avoid making mistakes, they dream up reasons to procrastinate, and their estate planning never happens…until it’s too late: They pass on without getting it done…

…and this creates a complex situation for their loved ones to address.

How can we make Estate Planning simpler?

We can start the process by asking four key questions that will establish a framework for developing the plan. Here they are:

The Four Estate Planning Questions

1.  Where do you want your assets to go once you have passed?

2.  When do you want your assets to be distributed?

3.  In what form do you want the heirs to receive the assets?

4.  Who should serve as your surrogate or proxy?

This is a great place to start. Answer these questions and you are halfway to the Estate Plan finish line.

Let’s focus on each question.

1. Where do you want your assets to go?

To help clarify your thoughts, start by writing down answers to the following related questions:

·        In general, what would you like to see happen with your money?

·        Do you want your assets to flow to family, friends, the IRS, or charity?

·        Are there certain individuals you wish to exclude?

·        Is there a fixed amount you would like each heir to receive?

·        Do you wish for certain heirs to receive specific assets?

2. When do you want your assets to be distributed?

Do you want these assets to transfer immediately or over time? And why? For each asset you identified in Question 1, when do you want it to transfer and to whom?

3. In what form do you want the heirs to receive the assets? 

There are two possibilities: (1) Outright or (2) In Trust? Generally speaking an “Outright” transfer will prompt an immediate transfer and “In Trust” would delay the transfer. We can discuss the pros and cons of each method after you answer this question.

4. Who should serve as your surrogate or proxy?

When it ultimately comes time to manage the distribution process, who would you like to manage the process, and why? Let’s break it down:

  • For health care and financial decisions, who and why?
  • For managing your assets, who and why?

Forming a logical estate plan that accomplishes all your goals can be simple and straightforward. Answer these four questions to establish the core framework for what you wish to accomplish. All you need is a little time and someone to help facilitate a discussion around these topics. Take some notes, summarize it, and then repeat it to confirm what you shared. Then we are on our way to the Finish Line.

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Jonathan Gassman CPA, CFP, CAP

9 East 40th Street

New York, NY 10016

T: 212-221-7067

The Retirement Maven

The Gassman Financial Group

DISCLAIMER: Any accounting, business, financial or tax advice contained in this communication, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. The opinions and analyses are subject to change at any time. If desired, The Gassman Financial Group including Gassman & Gassman CPA PC and G&G Planning Concepts Inc., would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired services. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument.

#estateplanning #wills #trusts #POA #Healthcareproxy #Executor #trustee #estatetax #charitableplanning #estatetax

I Have An Estate Plan – But Do I Like It?

For most, estate planning is a topic they do not wish to address let alone discuss. It can be an emotionally and financially challenging issue, therefore, people often procrastinate about creating a plan and the appropriate documents. According to an AARP survey: 60% of Americans lack a will or estate plan https://www.aarp.org/money/investing/info-2017/half-of-adults-do-not-have-wills.html yet its critical to the successful disposition of one’s assets and health care decisions to have their own customized plan in place.

So why don’t more people go through the estate planning process? Here are several of the more popular reasons shared with me over the years:

  1. Prefer not talking about death
  2. It’s bad luck to discuss death
  3. I don’t wish to create discord within our family
  4. Not sure who to leave assets to so better off not dealing with it
  5. Can’t figure out who to name as our fiduciaries such as trustees, guardians, and executors
  6. It’s overwhelmingly complex
  7. Simply don’t need to because I have nothing
  8. And the list goes on and on…

Do any of these resonate with you?

If one were to pass away without a will it is called dying intestate. When one dies #intestate, meaning without a will the state’s statutes govern, and probably once you understand the state’s rules you may wish to opt to create your own documents through a competent professional.

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Here is a fun example of a fake will that was given to me by a friend some time ago. It’s kind of a state’s interpretation of what is to happen if you die without a will. Plug your own name in or if you are married read it with your spouse aloud and see what they have to say.

The Will of Intestacy (not real of course)

Being of sound mind and Memory.

I__________________________, do hereby publish this as my Last Will and Testament:

FIRST, I give my spouse only one-half of each of my possessions, and I give my children the remaining one half.

I appoint my spouse as a guardian of my children, but as a safeguard, I require my spouse to report to the Probate Court regularly and render an accounting of how, why and where they spend the money necessary for the proper care of my children.

As a further Safeguard, I direct my spouse to produce to the Probate Court a Performance Bond to guarantee that my spouse exercises proper judgment in the handling, investing and spending of the children’s money.

As a final safeguard, my children shall have the right to demand and receive a complete accounting from my spouse regarding all of the financial actions with their money as soon as they reach legal age.

When my children reach age 18 they shall have full rights to withdraw and spend their shares of my estate. No one shall have any right to question my children’s actions on how they decide to spend their respective shares.

SECOND, Should my spouse remarry, her second spouse shall be entitled to one-third of everything my spouse possesses. Should my children need some of this share for their support, the second spouse shall not be bound to spend any of their share on my children’s behalf.

The second spouse shall have the sole right to decide who is to get their share, even to the exclusion of my children.

THIRD, Should my spouse predecease me or die while any of my children are minors, I do not wish to exercise my right to nominate the guardian of my children.

Rather than nominating a guardian of my preferences, I direct my relatives and my spouse’s relatives to get together and select a guardian by mutual agreement.

In the event that they fail to agree on a guardian, I direct the Probate Court to make a selection. If the court wishes, it may appoint a stranger acceptable to it.

FOURTH, Under existing tax law, there are certain legitimate avenues open to me to lower death taxes. Since I prefer to have my money used for governmental purposes rather than for the benefit of my spouse and children, I direct that no effort be made to lower taxes.

FIFTH, I appoint my spouse to handle my estate, but as a safeguard, I direct that my spouse give a Performance Bond to guarantee that they do everything exactly as they should.

IN WITNESS WHEREOF, I have set my hand to this Last Will and Testament this ________ day of _______________, 20xx.     Sovereign State of _____________

I hope you are not liking the way any of this sounds.

Stay tuned for more on the topic coming this week and of course if you have any questions please feel free to reach out to schedule a consultation.

Jonathan Gassman CPA, CFP, CAP

9 East 40th Street

New York, NY 10016

T: 212-221-7067

The Retirement Maven

The Gassman Financial Group

DISCLAIMER: Any accounting, business, financial or tax advice contained in this communication, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. The opinions and analyses are subject to change at any time. If desired, The Gassman Financial Group including Gassman & Gassman CPA PC and G&G Planning Concepts Inc., would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired services. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument.

#estateplanning #financialplanning #powerofattorney #healthcare #healthcareproxy #Financialadvisor #Trustandestate #LWT #wills

 

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