The Importance of Estate Planning in 2021: Part 2-Wills and Trusts

Striving for Peace in Uncertain Times

We are living in uncertain times: the pandemic, a new administration and congress, with many parts of the economy struggling. There is a tone of worry and stress as many are attempting to register for a vaccine. We are all striving for peace of mind.

Unfortunately, the COVID pandemic with its many complications has illustrated for us all how uncertain life can be and why we should protect ourselves and our loved ones by planning for the possibility of death or incapacitation. Your estate plan, once completed, can provide confidence that your affairs are in order and your wishes will be carried out if you become ill or pass away unexpectedly.

Provide a Sense of Peace by Planning Ahead

It is our opinion that planning for one’s death is important, but it is rarely urgent. At the point it becomes urgent, for example in the event of catastrophic illness, it may be difficult or even impossible to complete a plan that fulfills your wishes. It is best to do this type of planning without the stress or pressure of failing health or terminal diagnosis.

Due to people’s belief that estate planning is not “urgent” it is something that may get delayed, avoided, and all too often neglected. So, let us assume you are engaged in the process and have decided to stop procrastinating and are ready to address your own mortality.


If you Pass Away...

with No Will

If you pass away with no will, your state of residence will provide one for you. This is called dying intestate. The court orders your debts paid and your assets distributed by state law in proportions decided by law to your descendants - again, decided by law - and probably not what you would have wanted.

with A Will

A Will is a legal document that expresses a person’s wishes as to how their property is distributed at death. With a will, your debts are paid and assets are distributed per your wishes by the person you have chosen (often called an executor / executrix or personal representative). You can change your will at any time during your lifetime.

with a Living Trust

If you pass away with a Trust, your debts are paid, and assets are distributed by your chosen Successor Trustee according to your Trust’s written instructions. Again, you can amend your Trust if you wish during your lifetime. A Trust may be beneficial because it is a means of avoiding probate and potentially allowing for a quicker transfer of your assets.

Will Vs. Trust Conversation

It is beyond the scope of this article to compare the pros and cons of a Will vs a Trust. This is a conversation you should have with your attorney and other advisors. The purpose of this article is to encourage you to take the action necessary so that your wishes are fulfilled should the unexpected happen.

 

Getting your Estate Organized

In addition to having your legal documents prepared and up to date, it is also important to organize your affairs to assist the people managing your care or settling your estate. A little organization can save many hours of work for the people working to follow your wishes. Here are a few of the major items to prepare:

  1. List the names and contact information of your accountant, advisors, and attorneys.
  2. Identify where your important documents are stored, this includes your Will and/or Trust document as well as Powers of Attorney(s) and life insurance documents.
  3. List and locations of bank and investment accounts.
  4. Identify monthly bills to be paid.
  5. Don’t forget safe deposit box keys or combinations.
  6. Identify any passwords that need shared if you are unable to provide them.

At Medallion Group, we recommend having all of this information organized in one place, which can be helpful for you to assist the people managing your care or settling your estate. Here is a fillable template for you, as a place to get started. Click here to download our Estate Planning Letter of Love: Family's Financial Information. 

If you are unsure whether your estate planning documents are complete or up to date, consider reviewing them with an attorney. It is recommended that you review them every few years to assure they are current with your wishes and any changes in laws.

The advisors at Medallion are available as a sounding board, as well as a collaborative source to work with you and your attorney.

To read Part 1: Living Issues in our Estate Planning Series , click here.

To read Part 3: Leaving a Legacy in our Estate Planning Series , click here.

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About the Authors

John and Laura Stohlman have been working with clients to help them achieve retirement success since 1987. Both John and Laura have the following designations: Certified Financial Planner (CFP®) and Chartered Federal Employee Benefits Consultant (ChFEBC®).


 

At Medallion Financial Group, we believe financial planning is about Family. We have been helping families invest in the future since 1987 through a holistic planning approach. We recognize there are a variety of needs when it comes to retirement planning, plan rollovers, annuities, college planning, life insurance options, and investment management. It is easy to get lost in a sea of choices. Our financial advisors help with the basics and beyond to enable our clients to get the education, advice and management they need to retire with confidence.

Our focus is twofold: first and foremost, we are fiduciary advisors. We stand against any violation of laws, values, and ethics. Second, we treat our clients as part of our family, not only those who call Maryland and Georgia home, but clients across the US who have benefited from our reputation of personal service, integrity, and expertise.

We strive to exceed client’s expectations – because we have high expectations of ourselves.