Don't Ignore the Importance of Estate Planning

Elizabeth Verdi, CFP®, AIF® |

What do Jimi Hendrix, Bob Marley, and Sonny Bono all have in common?  They were all talented musicians – CORRECT! Additionally, they all died without a Will.  Their estates ended up in court and in some situations, the families have been fighting for decades.  We’ve all heard the “too late” stories with regards to estate planning.  Our goal as advisors is to identify the potential problems NOW and plan for the future.


I get it – talking about death is never a comfortable topic but it is necessary. Estate planning is traditionally step #2 or 3 in our firm’s financial planning process. Many clients drag their feet on making estate planning decisions – I call that “putting it in their hard pile”.  The “hard pile” is that stack of things you should do that really aren’t that hard – but you avoid them like the plague.  


We review an estate planning checklist with our clients to establish who the “major players” will be in the event of incapacitation or death.  We then refer our clients to an estate planning attorney to recommend and execute the plan.  The following documents are considered essential for estate planning purposes:


Health Care Power of Attorney

A Health Care Power of Attorney appoints an agent or attorney-in-fact to make health care decisions for you if a physician determines that you are incapable of making an informed decision.  The Health Care Power may incorporate the traditional Living Will and allow for refusal or termination of treatment when you are in either a terminal or “persistent vegetative” state.


Financial Power of Attorney

A power of attorney creates an agency relationship where you (the principal) delegate to another (the agent or attorney-in-fact) the authority to make financial decisions for you during your lifetime.  A financial power of attorney remains valid and operative despite your subsequent mental or physical incapacity, but is no longer valid and operative after your death.


Revocable Trust

A trust is an entity with full-fledged legal existence, similar to other legally authorized entities such as corporations and partnerships.  The person who creates a trust is variously called the trustor, the grantor, or the settlor.  The property contained within the trust is usually called either the principal or the corpus.  The trustee owns, manages and invests the property contained in the trust not for his/her own benefit, but for the benefit of the beneficiaries of the trust.  The trustor, trustee and beneficiary may all be the same person – you!

A Revocable Trust is established during your lifetime.  It may be revoked, altered, or amended at any time.  Trust provisions direct the distribution of trust income and principal for the benefit of you, your spouse and your family during your lifetime, and for the benefit of your surviving spouse and family after your death.


Pour-Over Will

A pour-over Will transfers to your Revocable Trust any assets not already transferred there by you during your lifetime.  The executor is the person named in your Will to handle the disposition and transfer under court supervision.  The Will also contains the appointment of a parent substitute or guardian if needed.


In all, these documents may seem daunting.  However, when in the hands of a capable estate planning attorney, you will find the process is truly part of the “hard pile” and not as difficult as you thought.  Both you and your beneficiaries will feel great relief that your estate will be in good order in the event of your passing.    




This information is intended to be educational in nature, and not as a recommendation of any particular strategy, approach, product or concept. These materials are not intended as any form of substitute for individualized investment advice. The discussion is general in nature, and therefore not intended to recommend or endorse any asset class, security, or technical aspect of any security for the purpose of allowing a reader to use the approach on their own. You should not treat these materials as advice in relation to legal, taxation, or investment matters. Before participating in any investment program or making any investment, clients as well as all other readers are encouraged to consult with their own professional advisers, including investment advisers and tax advisers.
Certain information contained herein was derived from third party sources as indicated. While the information presented herein is believed to be reliable, no representation or warranty is made concerning the accuracy of any information presented. We have not and will not independently verify this information. Where such sources include opinions and projections, such opinions and projections should be ascribed only to the applicable third party source and not to Rembert Pendleton Jackson.