The second component of Advanced Planning is Wealth Transfer.
A divorcee came into our wealth management office without a clear sense of where her assets were held, how they were titled, and how they would be transferred upon her death. As it turned out, her ex-spouse was listed on the most recent beneficiary documents of many of her accounts and life insurance policies. After extensive discovery and collaboration with an estate planning attorney specializing in divorcees, our client had a clear sense of her various assets, was able to consolidate most into a centralized location and update all of her beneficiary documents to reflect the mix of non-profits and family members she desired. In addition, in her case estate documents were amended by her attorney to include provisions to have her estate managed and distributed by a private fiduciary to alleviate any familial issues that might come with the stressful and emotional period following death.
Having worked so diligently to acquire wealth, our clients are best served by carefully and thoughtfully deciding how to transfer their wealth. While some clients seek to leave their wealth to family or children, some prefer to support charitable causes or other worthy recipients. Regardless of their desires, our goal is to facilitate the most efficient and direct transfer possible.
While estate planning attorneys assist in the creation of living trusts and other documents, your financial advisor does estate planning every time he or she helps you complete an IRA or life insurance beneficiary form, or assists you in titling taxable accounts.
For example, does the custodial agreement that holds your investments default to pro rata or per stirpes? Incoming clients often tell us that they’ve never been asked which of these was preferred but every document defaults to one or the other. Which is right for you? For detailed guidance on the difference between these two terms, please read Chapter 3, “Don’t Disinherit Your Children by Accident” in my book Make Your Money Last a Lifetime®.
One key aspect in our ability to facilitate Wealth Transfer is our collaborative approach with our clients’ estate planning attorneys and other professional advisors. We work closely with private fiduciaries, trust companies and estate planning attorneys to ensure our clients’ Wealth Transfer goals will be met in the most effective way possible.