November 22, 2024
Allworth financial advisor Michael Coates, CFP®, discusses essential estate planning strategies to help families secure their financial future, protect loved ones, and ensure a smooth transfer of wealth.
Let’s be honest: estate planning is one of those things that often gets pushed down the to-do list. After all, it’s not exactly the most exciting part of financial planning, and it’s easy to put off—until we realize it’s time to really think about what we want to leave behind for our loved ones. But the truth is, taking the time to set up a solid estate plan is one of the most impactful things we can do for our families. It’s about protecting our loved ones, preserving the legacy we’ve built, and making sure things go smoothly when we’re not around.
So, if you’ve been wondering where to start, here’s a look at some key estate planning strategies to help safeguard your family’s future. Think of this as a roadmap to creating peace of mind—for both you and those you care about most.
A will is usually the first place to start with estate planning, and for good reason. It’s a straightforward way to specify who gets what and to outline your wishes in clear terms. With a will, you can appoint a trusted person as your executor, someone who’ll make sure your wishes are carried out just as you intended. You can also name guardians for minor children, which is critical for young families.
Having a will ensures that there’s no question about where your assets go when the time comes. It’s a foundational document that every estate plan should have, even if you add more complex elements later on.
If you have a more complex financial picture or specific goals for how your assets should be managed, a trust might be a good option. Trusts can be incredibly versatile, offering more control than a standard will. For instance, with a trust, you can specify exactly when and how assets are distributed to beneficiaries, which can be especially helpful if you’re concerned about minors inheriting large sums at a young age.
Trusts also offer a layer of privacy, as they don’t go through probate—a sometimes lengthy and public process. And depending on the type of trust, they may provide tax benefits, which can mean more of your estate going to your loved ones rather than to taxes.
One often-overlooked area of estate planning is updating beneficiary designations on accounts like life insurance policies, retirement accounts, and payable-on-death bank accounts. These accounts don’t go through probate; they transfer directly to the beneficiaries you’ve designated. But here’s the catch—if these designations aren’t up to date, your assets could end up in the wrong hands, despite what your will or trust says.
Life changes like marriage, divorce, the birth of a child, or even the passing of a loved one can affect who you want as your beneficiary. Reviewing and updating these designations regularly helps ensure that your accounts reflect your current wishes.
Estate planning isn’t just about what happens after you’re gone; it’s also about preparing for situations when you might be unable to make decisions on your own. Setting up a health care directive, or living will, allows you to outline your preferences for medical treatment if you’re ever unable to communicate them.
Similarly, a durable power of attorney appoints someone you trust to manage your finances if you’re incapacitated. These documents are crucial to avoiding confusion and stress for your loved ones during a difficult time. They ensure that your wishes are honored and provide guidance to your family when they need it most.
Depending on the size of your estate, taxes could take a significant portion of what you leave behind. But with some planning, there are ways to reduce that tax burden. Strategies like gifting during your lifetime, setting up certain types of trusts, or even making charitable donations can help reduce the taxable value of your estate.
For instance, the annual gift exclusion allows you to give a certain amount each year to as many people as you like without incurring gift taxes. Not only does this reduce the size of your estate, but it’s also a meaningful way to support your loved ones while you’re still here to see the impact.
Working with a financial planner and an estate attorney can help you explore the best strategies for your unique situation, ensuring that more of your wealth stays with your family instead of going to taxes.
In today’s world, digital assets have become an important part of estate planning. Think about your online accounts, such as social media profiles, email accounts, digital photos, and even cryptocurrency. Make a list of your digital assets and provide instructions on how you’d like them handled. Some people prefer their social media accounts to be memorialized or deleted, while others want to ensure certain digital files or assets are passed along.
Documenting your digital wishes and sharing login information with a trusted person can help avoid confusion and ensure that your digital legacy is protected.
While the legal documents are important, don’t overlook the value of an honest conversation with your family about your wishes. Estate planning can sometimes bring up difficult emotions, but having an open discussion can prevent misunderstandings later on and give your family peace of mind. Let them know about the steps you’ve taken, where to find important documents, and why you’ve made certain decisions.
By bringing your family into the conversation, you’re creating a legacy that’s not just about assets but about values, love, and care for their future well-being.
Estate planning isn’t just about passing down wealth; it’s about creating security and protecting what you’ve worked hard to build. With a well-thought-out estate plan, you can have confidence that your family will be taken care of and your legacy preserved in the way you envisioned.
If you’d like to discuss any of these strategies further, I’m here to help. Estate planning may seem overwhelming, but with the right guidance, it can be a rewarding process that ensures your family’s future is secure.
Many of the clients I work with choose me because I’m a collaborative financial partner during the later years of their careers. When you’re in the final era of your work life, you need an equitable relationship with your financial advisor, so you feel empowered to make educated decisions that set you up for lasting financial success.
If you’re feeling uncertain about how to prioritize your goals, I’ll help to develop a path to get you to retirement in the most efficient way possible.
.svg)
.svg)
.svg)
.svg)
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.
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.