Most of us don’t like to consider death. After all, we’ve got years to go! And let’s focus on living our best life in those years, right?
But, especially after a certain age, there exists a certain peace of mind that comes from having prepared effectively for your passing – and having put an estate management plan into place.
Effective estate management enables you to manage your affairs during your lifetime and control the distribution of your wealth after death. An effective estate strategy can spell out your healthcare wishes and ensure that they’re carried out – even if you are unable to communicate. It can even designate someone to manage your financial affairs, should you be unable to do so.
At Signet, Estate Planning is one of our core business focuses, alongside comprehensive financial planning, socially-responsible investment management, insurance planning, review and implementation, tax planning and cash management solutions.
Everything we do is with our key fiduciary duties in mind – servicing your best interest, acting in utmost good faith, acting prudently, avoiding conflicts of interest, disclosing all material facts, and controlling investment expenses.
The professionals at Signet Strategic Wealth Management provide transparent financial advice and services for sophisticated investors committed to social change. Our great hope is to help you align your estate plan with your personal values, and enable you to leave the legacy you desire.
Let’s explore a couple topics related to estate planning in 2020.
THE DIFFERENCE BETWEEN ESTATE PLANNING AND WILL PLANNING:
For many people, estate planning and will planning seem like the same thing. Both provide your loved ones with instructions on how to handle your property after death.
But estate planning often goes ‘beyond’ will planning, and can help outline your wishes regarding your health, finances, and beyond2 … even while you’re living.
Generally, will planning is simply considered the act of preparing a Last Will and Testament3, which gives you the ability to distribute your estate, choose your heirs, appoint guardianship, and give your belongings to your chosen people. In addition, it names an executor, names a guardian for minor children, directs how property is distributed, and more.
One of the key components of estate planning is establishing financial power of attorney. Much like the executor of a will, this tells a designated appointee how to manage your finances if you are unable to control them. In effect, a power of attorney document gives an agent the authority to pay bills, write checks, make deposits, sell or purchase assets, sign tax returns and more.
Ultimately, it’s generally thought that estate plans will answer a few of the most pressing questions – who will receive your property when you’re gone, who will be entrusted with transferring your property to your beneficiaries, who will make your healthcare and financial decisions if you’re unable to, and who will you nominate to take care of your children, if both parents are deceased?
ESTATE PLANNING IN THE AGE OF COVID-19:
The black swan event is here – the rapid spread of the coronavirus pandemic has motivated many older Americans to begin planning their estates, in the event they catch the virus, fall ill and pass away.
First and foremost, power of attorney should be established, so that a person’s financial affairs and property can remain in order, in the event of incapacitation.
Next, a health care proxy should be set up. Similar to a power of attorney4, the health-care proxy is a “legal document that gives an agent the authority to make health-care decisions on your behalf if you are incompetent or incapacitated.
A Last Will and Testament should be drawn up next, which we discussed earlier. But the next important step is to set up a Living Trust, which is a legal contract to create an entity to hold your assets. This can be set up at any time, and it can be configured to outlive you. One of the main benefits of a trust is to appoint a successor who steps in and manages your affairs, so that your family can avoid the extra time and money associated with the probate process.
The COVID pandemic has created a couple interesting points of concern for those considering an estate plan -- such as current low interest rates and increased market volatility.
Here are just a few of the questions and concerns that qualified professionals, such as financial planners, tax attorneys and accountants, can help you consider, as you embark on your estate planning process:
-Considering historically low interest rates, should you be refinancing any loans to family members and other beneficiaries?
-Who will be named as owners, beneficiaries and second beneficiaries on life insurance policies, IRAs, 401(k)s, and any other similar plans and/or payable-upon-death accounts?
-Should the appointments of executors, trustees and guardians for minor children be updated?
SAFEGUARDING YOUR DIGITAL ESTATE – A FEW QUICK TIPS
It seems like everything is done digitally nowadays. Do you ever wonder … if you died, what would happen to your e-mail archives, social profiles and online accounts?
The average person has roughly 40 accounts requiring a password, and 71% choose to memorize their passwords. Without those passwords, your loved ones may be unable to shut down your Facebook page, access your accounts, and protect your personal correspondence.
Here are two action items you can do right now to help safeguard your digital estate. First, take an inventory of all your digital assets, including e-mails, social profiles and any online business accounts.
Decide what you want done with these in the event of your death, and leave instructions with someone you trust. Second, make a list of your passwords and keep them in one location. Web applications, like 1password.com1, can make it simple. We live in a digital world, and when it comes time to leave it, make sure that your digital assets are taken care of. Call today, and let’s discuss your digital asset strategy!
HOW SIGNET CAN HELP:
It is our mission to provide investment resources and strategies to clients and financial institutions helping them develop a greater knowledge and passion for sustainable, responsible and impact investments.
Let us help you find your mark with our experience.
SOURCES:
1.) 1password.com
www.1password.com
2.) Lexology – “The Differences Between Will Planning & Estate Planning”, 1.28.2019
https://www.lexology.com/library/detail.aspx?g=5bdfa873-57ed-4381-856f-6d7e6d5a82b0
3.) Willing.com – California Last Will and Testament
https://willing.com/california-last-will-testament.html#:~:text=California%20Last%20Will%20and%20Testament&text=A%20Last%20Will%20and%20Testament,for%20after%20you%20pass%20away.&text=The%20legal%20requirements%20for%20making,California%20Probate%20Code%20%C2%A7%206100
4.) Estate Planning In The Age Of Covid – Financial Advisor
https://www.fa-mag.com/news/estate-planning-considerations-in-light-of-covid-19-56321.html