FINANCE NEWS: Leave a Lasting Legacy

Proper Planning Can Help You Pass On More Than Just Money

You’ve worked tirelessly to attain a certain degree of financial success. And while nobody wants to think about their family’s future without them, putting off estate planning can leave your loved ones both financially vulnerable and emotionally troubled as they struggle to deduce what you would have wanted.

Remember, it’s not just your wealth you want to pass on to the next generation; it’s also your values.

At a minimum you’ll want to have a comprehensive will crafted with the guidance of an estate planning attorney, as well as a durable financial and medical powers of attorney and a living will.

Keep in mind that a living will is not the same thing as a durable medical power of attorney. A living will makes your wishes known when it comes to life-prolonging medical treatments.

A durable medical power of attorney authorizes another party to make medical decisions for you (including end-of-life decisions) if you become incapacitated or otherwise unable to make these decisions.

Working in tandem, all of these documents will help to save your heirs from potentially expensive and stressful headaches linked to probate and ambiguity.

Along with the provisions of a simple will, trusts may afford you both added tax advantages and greater flexibility in accomplishing a wide range of estate planning objectives.

Trusts can facilitate the transfer of your assets both during your life and after your death, giving you peace of mind that your spouse will be provided for and that your assets pass to intended beneficiaries according to your directives, and also help to:

♣ Avoid probate and protect your privacy;

♣ Offer a structured, tax-efficient way to achieve your charitable goals;

♣ Provide sound asset management and protection for your spouse and beneficiaries;

♣ Provide for your minor children or loved ones with special needs;

♣ Manage the value of your real estate or special assets;

♣ Minimize the potential for family conflict; and

♣ Make optimal use of available gift, generation skipping and estate tax exemptions.

Review Your Beneficiary Designations

Who are the beneficiaries of your IRA and 401(k)? How about any annuities, pensions or life insurance policies? Time has a way of altering our beneficiary decisions. So if it’s been a while since you’ve reviewed them, now might be a good time to do so.

Many people don’t realize that their beneficiary designations take priority over any provisions in their will when it comes to retirement accounts, life insurance and other “non-probate” assets.

For example, if an ex-spouse is the named beneficiary on your life insurance policy, he or she will receive that death benefit when you die, even if your will stipulates that it goes to someone else. This is why estate planners typically suggest that you review your designations every two years.

Share Your Values Along With Your Wealth

Philanthropy offers a tremendous opportunity not only to teach the next generation about managing their wealth effectively, but also to encourage their empathy, their generosity and their community engagement.

There’s really no right or wrong way to give, but planned giving vehicles such as donor-advised funds and charitable trusts offer benefits above and beyond outright gifts.

They enable assets to be irrevocably gifted and tax-efficiently sold, while still providing you or your family with an income stream.

They also allow the assets you’ve gifted but not yet granted to continue being professionally managed so they can potentially grow and provide an even bigger gift to the charity.

Your charitable desires may be the single most important legacy that you leave to your heirs: sparking in them a selfless desire to support the causes they too care deeply about.

Paul Taghibagi is a Founding Partner at Signature Estate & Investment Advisors, LLC (SEIA). SEIA is an independent registered investment advisory firm providing sophisticated, unbiased financial expertise and a high-touch service infrastructure to individuals and families. SEIA’s comprehensive wealth management services include investment management, estate planning, retirement planning, multi-generational planning and philanthropic planning. Contact Paul Taghibagi for more information: (310) 712-2323 or pt@seia.com.