727.441.9022
611 Druid Rd E • Suite 105 • Clearwater, FL 33756
V. Raymond Ferrara, CFP®
Chairman
Chief Executive Officer
ESTATE PLANNING ISN’T JUST FOR THE WEALTHY
MAY/JUNE 2017 | TAMPA BAY MAGAZINE 91
Eric R. Ebbert, MBA, CFP®
President
Chief Operating Officer
Although it is entirely possible by the end of the summer that
President Trump and the Republican Congress will have passed
tax reform, including the elimination of estate taxes, it doesn’t
mean that you shouldn’t have an estate plan in place. Here are
some things to consider for even the most basic of estate plans
– with or without estate taxes in play.
At the core of any plan is having the proper documents (will,
power of attorney, healthcare surrogate, and living will) in place
and making sure they are current. Regardless of age or wealth,
it is important to have these documents prepared. For some, a
living trust should be considered as it will help minimize the cost
and time delays of probate and provide for someone to manage
your affairs if you are unable to do so. If you set up a living trust,
you must retitle the assets into the name of the trust, otherwise
the assets will still go through probate and defeat one of the
major reasons for setting up the trust in the first place. Before
visiting with an attorney be sure to bring a list of the assets with
you for review.
When was the last time you updated these documents? These
documents should be reviewed at least every five years. Finally,
make sure that they are in a safe place, but do not put them into
a safety deposit box. We provide our clients a secure vault at our
website for safe storage and easy access worldwide.
Some assets will transfer without the use of any legal documents.
Some pass by law. Usually spouses will title assets using Tenants
by the Entirety or Joint Tenants with Rights of Survivorship
(JTWROS). These assets pass directly to the surviving owner.
Other assets, including life insurance, annuities, IRAs and other
retirement accounts, transfer by use of a beneficiary designation.
When was the last time you got an actual copy of the beneficiary
designation on these types of accounts?
Do you have the right beneficiary on the forms? Do they need
to be updated? Did you get married or have a child? Did a
beneficiary predecease you? Did you go through a divorce and
forget to change the beneficiary on the policy at work? Have
you had a significant change in your financial picture – positive
or negative? Do you have primary, contingent, and possibly
tertiary beneficiaries named? If you intend to leave money at
death to a charity, one of the best assets to use is your IRA since
these assets will not be taxed for income or estate tax purposes
if left to a qualified charity.
Be sure to think long and hard about leaving the money outright
to the heirs versus leaving it to them in a trust. By using a trust
you can possibly keep a spendthrift heir from fettering away the
money, provide for a special needs heir, and protect the assets
from the creditors (including a spouse) of the heir.
Have you considered what will happen if you are unable to
handle your own finances due to incapacity? Have you considered
how you would pay for long term care? No, Medicare doesn’t
pay for very much of it. Will you self-fund, or perhaps consider
a long term care insurance or annuity policy?
Just how much net worth do you have? Don’t forget to add in
the value of any life insurance you own. Under current law, those
with an estate below $5.49 million ($10.98 million for a couple)
probably do not need to get any more sophisticated than what
we have already discussed. However, should you be above this
level and assuming that estate taxes are not eliminated; there are
other techniques you want to consider when you discuss this
with the attorney.
Not having an estate plan is an option, but generally not
a good one. If you would like to explore these and other
thoughts regarding your estate plan, please give us a call for a
complimentary visit.
About ProVise Management Group, LLC: ProVise is a financial planning and investment management firm registered with the Securities and Exchange Commission (SEC)
and has been in business since 1987. Our 12 professional advisors serve approximately 1030 clients in over 30 states. As of 12/31/16 we were managing approximately
$1.28 billion for our individual, corporate, not-for-profit, and 401k retirement plans. Please visit our website at: provise.com. Investment Advisory Services offered through
ProVise Management Group, LLC. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations
are complex and are subject to change.
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