Skip to content

    Can you answer these 5 estate planning questions?

    March 26, 2022

    Allworth Co-CEO Scott Hanson shares a few basic - yet essential - estate planning questions that everyone should be able to answer. 

     

    It’s a tough topic.

    And I certainly understand why some people pass away without ever having done any estate planning.

    But while I understand it, not putting at least a will in place thrusts family members into an incredibly awkward and stressful situation that can ruin lives.

    When it comes to estate planning, a little education can go far. Here are five end-of-life estate planning questions that everyone should be familiar with.

    1. What is probate?

    Probate is the legal process through which a will is “proved” and accepted by the state as valid. The validity of a will is concerned with things such as it being the last true will and testament at the time of death, and that the estate and its assets are being distributed in accordance with law.

    The amount of time it takes an estate to pass “through” probate, and the costs associated with it, can shock people. It varies by state, but, depending on where you live, probate can eat up a whopping 10% of an estate’s value and take years to complete.     

    2. What is a will?

    A will (also referred to as a “testament”) is a legal document that contains a person’s wishes regarding how they want their assets and property distributed at the time of their death. The will also identifies an executor, which is the person who will manage the process and oversee the completion of the distribution of the property and assets in accordance with the wishes of the deceased person.

    While not foolproof, a well-conceived will takes the burden of deciding “who gets what” out of the hands of the heirs and beneficiaries. And, contrary to popular belief, while it makes the process much smoother, a will does not preclude your estate from passing through probate. 

    3. What is a beneficiary?

    When a person creates a will, it will include beneficiaries. In the most general sense, a beneficiary is a person or entity who is listed to receive money from the deceased benefactor.

    Importantly, if an asset held by a financial institution (such as a retirement account), has a “named beneficiary," then that asset goes directly to the named person without having to pass through probate. Other assets that allow for named beneficiaries are life insurance, checking, savings, and brokerage accounts.

    Because named beneficiaries supersede anything in your will, always make it a point to update them anytime you experience a big life event such as marriage, divorce, re-marriage, etc.

    4. What is a revocable trust?

    Usually concerned with assets such as houses or property, a revocable trust, or living trust, avoids probate by listing the beneficiaries who will receive the asset upon the death of the owner.

    A revocable trust essentially replaces all or part of a will. It allows the property owner to pass the asset to the intended recipient rather than having it first pass through the court system. One of the key benefits of a revocable trust is that it can be altered or changed at any time.

    5. What is power of attorney?

    Also known as “letter of attorney,” power of attorney is written authorization for someone to act on behalf of another - legally or financially. This can include private affairs, business decisions, or, really, just about any decision or action.

    The person granting permission for others to act on their behalf is called the grantor, principal, or the donor of the power. The person who is granted power of attorney is referred to as the “agent.”

     

    One of the biggest reasons we recommend working with an estate planning attorney is because the transfer of assets is such an important part of the financial planning process. You’ve accumulated wealth and, while it’s difficult to consider your own mortality, most people want to protect and preserve their hard work for the benefit of their family and loved ones.

    So, the big question is, who needs a will? Anyone who is married, has kids, or has assets.

    It’s not an overstatement to say that having a well-conceived will can keep your family from experiencing the type of conflict that can destroy even the strongest bonds.
    © 1993-2024, Allworth Financial. All rights reserved.

      Privacy Policy   |    Disclosures   |    Cookie Preferences   |    Do Not Sell or Share My Personal Information

       

      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.

      8 USA 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.

      9 NBRI 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.