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Beyond the Numbers

Beyond the Numbers

Trusted advice to help you think big and plan bigger.

Is It Time for an Estate Plan Check-up?

Portfolio Manager
Wealth Advisory Services, Cincinnati

A recent Gallup poll found that just 44% of Americans have a written last will and testament, meaning that more than half of Americans will leave no indication as to how assets should be handled upon their death. Sadly, dying without a plan in place or even an ill-conceived plan only serves to increase stress for heirs, who in addition to grieving the loss of a loved one, are forced to deal with the hassle and complexity of the estate settlement process. A common misconception is that only the ultra-wealthy need an estate plan. Another common mistake is to believe that once an estate plan is created, it will never need to be revisited. This is simply not the case. There are several reasons to act now to prepare for the inevitable.

Who should worry about estate planning, and why?

Estate planning is important for everyone to consider, regardless of wealth, because it involves more than just money. Age and/or illness often lead to the need for others to step in to assist with financial and health care matters. Even if that doesn’t occur, everyone should have a plan in place for the distribution of assets upon death.

What is an “estate plan?”

At a minimum, an effective estate plan consists of the basic legal documents that give direction as to what should occur at various life stages, particularly at the end of life.

  • Financial power of attorney
  • Health care directives (health care power of attorney, living will, health care information release)
  • Last will and testament
  • Trust

Each document serves a particular purpose. A financial power of attorney enables an agent or agents to act on behalf of another person with respect to financial matters. Health care directives allow an agent to do the same with respect to health care decisions. These documents are effective only during the lifetime of the individual.

A last will and testament controls the disposition of probate assets – generally, assets titled in one’s individual name at the time of their death. A will can also appoint a guardian for minor children. A will takes effect at the time of death. A trust controls the disposition of assets titled in the name of the trust or assets that pass into the trust upon death. A trust can be effective both during one’s lifetime and after death.

When should I begin thinking about estate planning? If I have an estate plan in place, when should I review it again?

Certain life events create good opportunities to create or revisit estate plan documents. Some examples are:

  • Marriage
  • Divorce
  • Death of a loved one
  • Substantial change in assets

Is it time for an estate plan check-up? 

  • Birth or adoption
  • Retirement
  • Change in health
  • Change in family circumstances

Three Key Questions

  1. How much of your assets do you need to retain during your lifetime to feel financially secure?
  2. How much wealth do you want to transfer to your family, and how and when should it be transferred given your family’s unique circumstances?
  3. With what’s left, how much should be given to charity?

Our focus is to help answer these questions and create a plan that will achieve your specific goals. When the time comes to write these documents, we partner with clients and estate planning attorneys to ensure the documents are aligned with client objectives.

Asset titling is another critical piece of every estate plan. Appropriately naming investment and bank accounts along with personal assets and real estate can greatly simplify matters for your heirs. In addition, it is critical to confirm and frequently review all beneficiary designations for retirement assets and insurance policies. For many people, beneficiary designations are the most important part of the estate plan.

Johnson Investment Counsel and Johnson Trust Company are well positioned to assist with the estate planning process. If you have questions of your own, reach out to us.

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