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Your Estate Planning Team: Make Sure Everyone is on the Same Page

The definition of estate planning I always come back to is that a good estate plan will:
  1. Ensure that you are properly taken care of in the event you become disabled;
  2. fficiently transfer your estate exactly as you intend after you pass away; and
  3. Minimize, to the greatest extent allowed under the law, the costs, fees, and taxes associated with administering your estate.
In order to create an estate plan that meets these goals your attorney cannot be the only member of your team. It must be a collaborative effort between the client, the estate planning attorney, and the client’s financial advisor, insurance advisor, and accountant. Every client has a unique family and financial situation that causes us to structure an estate plan in different ways.

One of the most common places an estate plan can get screwed up is by using beneficiary designations. This is where it is so important that all of the advisors are on the same page regarding how the estate plan will be structured.

I’ll use an example. Say I have a client with modest assets and three children. On his instruction I prepare an estate plan that leaves 10% of his estate to his church and the remaining balance in four equal shares to his three children and one grandchild who checks in on him every week. Say this client had a life insurance policy that he purchased ten years ago. At the time he filled out the beneficiary designation for the life insurance policy he named his three children as the remainder beneficiaries. If that life insurance policy is a majority of the client’s assets and the attorney doesn’t coordinate with the insurance advisor, then the client’s estate plan isn’t going to accomplish what he had intended. The church and the grandchild are going to get significantly less than the client wanted.

In most situations, I recommend to my clients that we update their beneficiary designations to name their revocable living trust as the beneficiary (after a surviving spouse). For a variety of reasons, I don’t recommend this strategy for any tax-deferred accounts. This strategy works especially well for clients who have a tendency to change their mind about the final distribution of their estate. The client needs only amend the terms of the trust instead of getting beneficiary designation forms for every investment and policy they own. By working together as a team each of the client’s advisors can provide value to the client. In order to truly serve the client’s needs, each advisor needs to have input into the plan. More importantly, after the plan has been designed, every advisor needs to be a on the same page in the implementation of the plan so that the client’s wishes are actually fulfilled.


By: Andrew Mays
Andrew is a partner at the law firm of Hauk & Owens, LLC in West-Central Illinois who focuses his practice in Estate Administration, Probate, and Estate Planning.

DISCLAIMER: This publication is not intended to be legal advice but is presented for informational and educational purposes only. The facts and circumstances of a specific legal issue are unique and you should seek legal advice for your specific questions or concerns. The choice of a lawyer is an important decision and should not be based solely upon advertisements. No attorney-client relationship is created. Posted: 7/6/2016

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