3 key advantages of creating an estate plan

October 12, 2023

Allworth co-founder Scott Hanson outlines three of the biggest ways putting an estate plan in place now can help your family down the road.

Did you know that we provide our clients with estate planning guidance?

Why do we do that?

From a financial and legal perspective, estate planning is the preparation and the execution of the forms and documents that are required to carry out your wishes in the event you are incapacitated or pass away.

Unfortunately, far too many people don’t think about estate planning until it’s too late. And that’s unfortunate because estate planning is an integral braid in the chain of your overall financial plan. The fact is that having an estate plan in place, even decades before it’s needed, not only gives you peace of mind, but it can help you to preserve your wealth right now while simultaneously protecting your heirs in the future.

I’m going to define some of the key terms involved in estate planning and then provide you with 3 of the biggest reasons why everyone should put an estate plan in place.

What is a will?

A will, or a last will and testament, is a legal document that instructs the State and your heirs about how you would like your property and other assets to be distributed after your death.

What is durable power of attorney?

Durable power of attorney is a legal document that authorizes your representative to manage your financial affairs if you become unable to manage them yourself.

What is an advance directive?

Sometimes referred to as a 'living will,' an advance directive is a legal document detailing a person’s wishes regarding care in the event they are unable to make decisions for themselves.

What is a trust?

A trust is a fiduciary agreement that’s part of a well-thought-out estate plan. It can be used to minimize taxes and hold property and assets separately for the good of beneficiaries.

What are 3 reasons you need to put a plan in place?

First, there’s the benefit of having your wishes carried out.

I’ve known people with estates worth millions of dollars who died with no legal directives in place, and the results were not merely unfortunate, the impact on family and loved ones was nothing short of catastrophic.

I’ve seen generations of once close-knit families forever dissolved due to infighting because a person procrastinated and neglected to finalize their estate plan.

And remember, you absolutely do not have to be a millionaire to have an estate plan.

You’ve worked hard, so don’t leave your legacy to chance or interpretation. Work with an advisor and an estate planning attorney to make certain that your wishes are carried out and that your loved ones, or your favored charity, or perhaps even your alma mater, are looked after in according with your wishes.

Next, an estate plan will establish and secure the oversight of your healthcare directives and even your financial well-being in the event you are unable to make important decisions for yourself.

Alzheimer’s. Stroke. Respiratory disease. Debilitating cancer. No one wants to think about these things, but they eventually touch the lives of virtually everyone. And, truth be told, right up there at the top of the list of things that most of us don’t want to consider – even ranking above thoughts of our own demise – is the thought of our own incapacitation.

And while incapacitation is an unfortunate reality for tens of millions of people, perhaps the only way to make that terrible reality worse is to become incapacitated and then be legally and financially unprepared for it.

Simply, that’s a mistake that makes an undeniably terrible event worse.

An estate plan will enable your loved ones (or other designee) to make vital decisions for you if-and-when it becomes necessary.

Lastly, an estate plan keeps “the State” from deciding who will inherit your life’s work.

Even if we’ve never met, I can assure you that you do not want “the State” deciding who will receive your assets in the event of your demise.

But that is what happens if you die 'intestate,' which means you pass away without a will.

Formal probate is the analysis and administration of assets by the State that were previously owned by a person who dies, in this instance, without an estate plan. It is the State taking charge of your life’s work, taking a percentage of assets for administrative costs (could be 10%), and then deciding who gets what out of what remains.

And importantly, while you probably can’t avoid probate with just a will, depending on the state in which you live, you likely can with a formal trust.

We at Allworth Financial long ago decided that estate planning was every bit as important to a person’s overall financial well-being as investment management, or behavioral financial guidance that helps keep people from making mistakes from which they can’t recover.

You ever notice how some families hang on to their wealth, generation after generation, while others may quickly rise and then just as quickly decline financially after a single generation passes away?

While of course there are other factors, the one thing that virtually all families have in common who manage to pass whatever wealth they accumulate down to subsequent generations is a commitment to the value of estate planning.

Advisory services offered through Allworth Financial, a Registered Investment Advisor | Disclosures | Privacy Policy

Securities offered through AW Securities, a Registered Broker/Dealer, member FINRA/SIPC. Check the background of this firm on FINRA's BrokerCheck.

HMRN Insurance Agency, LLC license #0D34087

¹Barron’s 2024 Top 100 RIA Firms. Barron's© magazine is a trademark of Dow Jones L.P. The ranking of independent advisory companies is based on assets managed by the firms, growth, technology spending, succession planning, and other metrics.

² Retention Rate Source: Allworth Internal Data, FY 2022

³ The NBRI Circle of Excellence Award is bestowed upon NBRI clients meeting one or both of the following criteria: Total Company score at or above the 75th percentile of the NBRI ClearPath Benchmarking Database and/or improvement of five (5) or more benchmarking percentiles in Total Company score over the previous survey.

⁴ As of 7/1/2024, Allworth Financial, an SEC registered investment adviser and AW Securities, a registered broker/dealer have approximately $22.5 billion in total assets under management and administration.

⁵ InvestmentNews 2020 and 2021 Best Places to Work for Financial Advisers. The ranking reflects survey responses and scores completed by both employers and employees. Employers report their organization’s workplace policies, practices, and demographics. Employees complete a survey designed to measure the employee experience.

⁶ 2021 Value of an Advisor Study / Russel Investments

⁷ Ranked 9th Top Wealth Managers By Growth in Assets in the U.S. from RIA Channel, 2022. RIA Database and RIA Channel are registered trademarks owned by Labworks, LLC.

⁸USA Today Best Financial Advisory Firms 2024. The ranking is based on the growth of the companies’ assets under management (AUM) over the short and long term and the number of recommendations they received from clients and peers.

⁹NBRI Best in Class Ethics 2023. The Best in Class level is bestowed upon clients performing at or above 90 percentile of the NBRI ClearPath Benchmarking Database.

^✢ Scott Hanson, Investment Advisor 2005, 25 most influential people in the financial services industry. The ranking reflects 25 people who Investment Advisor magazine believes have had or will have the greatest influence on the financial services industry.

^✼Pat McClain, InvestmentNews 2014, Invest in Others Community Service Award, presented to an advisor who has made an outstanding impact on a community through managerial contributions to a non-profit organization.

^†Financial Times, FT 300 Top Registered Investment Advisers, June 2019. The ranking reflects six areas of consideration including the company's years in existence, industry certifications of key employees, AUM, asset growth, SEC compliance record and online accessibility and calculates a numeric score for each company.

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

Important Information

The information presented is for educational purposes only and is not intended to be a comprehensive analysis of the topics discussed. It should not be interpreted as personalized investment advice or relied upon as such.

Allworth Financial, LP (“Allworth”) makes no representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of the information presented. While efforts are made to ensure the information’s accuracy, it is subject to change without notice. Allworth conducts a reasonable inquiry to determine that information provided by third party sources is reasonable, but cannot guarantee its accuracy or completeness. Opinions expressed are also subject to change without notice and should not be construed as investment advice.

The information is not intended to convey any implicit or explicit guarantee or sense of assurance that, if followed, any investment strategies referenced will produce a positive or desired outcome. All investments involve risk, including the potential loss of principal. There can be no assurance that any investment strategy or decision will achieve its intended objectives or result in a positive return. It is important to carefully consider your investment goals, risk tolerance, and seek professional advice before making any investment decisions.