Broker Check

Estate Planning 101

May 24, 2019

This week we are going to begin a multi part series on estate planning beginning with a high-level overview of the basics.  In the coming weeks we will dive into specifics on critical components of an estate plan for families with children that have disabilities and may require lifetime care and support.

Most times I ask folks if they have completed the essential estate planning documents, I get one of two answers:

No, I have not or yes, I have a will.  My belief is that estate plans should be completed by an attorney specializing in estate planning.  When this is not the case, many times the other essential components are left out and the individual ends up with a simple 1 page will believing they are all set.

Many times, a will is the main component of an estate plan although that can vary depending on the estate and the attorney.  It will ensure property is distributed according to your wishes.  It should be written in a manner that is consistent with state law.  Your will should be coordinated with your beneficiary designations (to be discussed shortly).  Some financial accounts do not pass according to the directions laid out in a will such as life insurance policies, retirements accounts, annuities and some additional accounts depending on how they are titled.

A durable power of attorney would allow someone to act on your behalf when you are unable to do so.  In the absence of a POA you would be allowing the courts to determine what happens to your assets if you are found to be incompetent or incapacitated.  Health care powers of attorney allow the agent to make important health care decisions on your behalf.

Beneficiary designations, as briefly touched on a moment ago, are listed on financial property mentioned above.  The proceeds will pass to those listed and bypass your will.  If you do not name a beneficiary or if they are deceased or unable to serve, then those assets will pass through your will.  In the event this occurs, a court may be left to decide the fate of your assets.  Typically, people do not want an unfamiliar judge with no knowledge of their wishes to make these types of decisions on their behalf.

A letter of intent is simply a document left to your executor or beneficiary documenting what you want done with a particular asset after your death or incapacitation.  They could also provide funeral details, special requests and things of that nature.  They could also be helpful in letting a probate judge know what your intentions were, even if not deemed to be valid by law.

Guardianship designations are for our minor children.  This is very often overlooked.  Those you select to look after your children should share your views, be financially sound and have a willingness to take over such an important responsibility.

Last up are trusts.  A trust is a fiduciary arrangement whereby a trustee holds property for the benefit of one or multiple beneficiaries.  Assets in a trust may also be able to pass outside of probate, saving time, money and reducing estate taxes.  They can also be used to preserve eligibility of government benefits for a beneficiary with special needs.  Not everyone needs a trust or will create a trust, but many times they are necessary and not for estates with significant value.  Over the next couple of weeks, we will dive deep into the types of trusts primarily used in special needs planning so stay tuned.

Kevin Pent, ChSNC®, Chartered Special Needs Consultant can be reached at