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Transferring Your Assets Exactly How You Desire

Vanessa Burke Lee, CPA, CFP®

Apr 5, 2022

Creating an estate plan can be an emotional process. We don’t like to think of a time when we won’t be here for our loved ones. Like many of us, my husband and I were procrastinators on getting our estate plan in place. When our kids were little, we only had a handwritten note naming a guardian and that was about it. About ten years ago, we finally worked with an estate attorney and created a formal plan which documented who and how someone would care for our three sons if we were no longer there to care for them.

Proper estate planning ensures that your assets will transfer to your heirs and most importantly, that you and your family will be cared for according to your wishes. Like most personal finance issues, there’s no one perfect approach to estate planning, as no two families are alike. A number of factors and life circumstances will impact how you end up deciding how to transfer your assets, such as the number and ages of your children, your net worth, and your personal values.

Estate Plan Basics

Your first step will be contacting and meeting with an estate planning attorney. At this meeting, the attorney will ask you many questions about you and your family, your financial assets, who you would like to manage and inherit those assets and your wishes for end of life care.

An estate plan is essentially a collection of documents that typically includes:

A will, and possibly a trust
Guardianship designations
Beneficiary designations
Durable or financial power of attorney
Health care power of attorney

An estate planning attorney will guide you through the process, relying on their understanding of state and federal regulations and your personal situation to complete the right plan for you.

One major decision in the process is determining the need for a trust.

Wills vs. Trusts

According to a recent Gallup survey, just 45% of US adults have a will. If someone dies with no will or trust in place, the result can be a mess of paperwork and stress for the family left behind. One of the main benefits of creating a will or trust is avoiding the burden on your family of trying to manage and distribute your estate without the authority or a clear plan to do so.

A last will and testament, or will, is a legal document that directs how your assets will transfer following your death. Wills are typically less costly to create than trusts, but also can’t accommodate more complex provisions for how you transfer your assets to your heirs.

Unlike a will, a trust forms a separate legal entity where the trust’s creator, or grantor, is able to hold assets for beneficiaries, typically family members, friends, or charities. The trust is most often a living or revocable trust which allows grantors to amend the trust terms throughout the grantor’s lifetime.

The Advantages of Trusts

Not every estate plan includes a trust, but in many cases, trusts can be an ideal vehicle for asset planning. Trusts give greater control over the transfer of assets, allowing grantors to set specific rules for how assets will be distributed. For example, a trust allows grantors to designate an age for when children receive their inheritance, or even tie distribution to conditions such as college graduation.

Trusts are also well-structured for children with disabilities, as they allow grantors to provide specific instructions for their care. This provides peace of mind for you and your family by simplifying a complex situation and keeping you in control of their care rather than the courts.

Trusts also allow you to avoid the probate process, which can be costly and take up to a year to complete. By avoiding the probate process you’re gaining more privacy for your family, as you’re not required to share your assets with a probate attorney. During the probate process, a probate attorney authenticates the will by naming an executor, who will carry out your asset transfer directions upon your death.

Naming and Reviewing Beneficiaries

Beneficiaries serve to specify which individual, or individuals, will receive assets after the grantor’s death. Designating beneficiaries is never a set-it and forget-it process. Circumstances often change over the course of a lifetime. Perhaps you’ve gotten remarried or had additional children. You may have changed jobs and opened a new retirement account, which will require additional beneficiary designations.

On the other hand, sometimes relationships can sour and you may want to remove a beneficiary. Whatever the situation, you’ll want to regularly review your beneficiaries to ensure they remain up-to-date and accurately reflect your wishes. Your estate plan should be reviewed (and revised, if necessary) every few years or around major life events.

Working With TCI

Our three sons are now grown and starting careers and lives of their own. Yes, it sure goes fast! We are about to make changes to our own plan that better reflects our changing needs. It gives us peace of mind to know that our plan is in place and that our boys will be covered.

An estate attorney will help you put a plan in place that helps ensure that your wishes will be carried out. But just like in our family, circumstances change over time and your estate plan must be monitored and updated when needed. Whether it’s the difference between state and federal laws, relationship and job changes, or financial complications, estate planning is an ongoing process.

Working with TCI Wealth Advisors ensures that you stay in control of your estate planning, no matter how much your circumstances, or your wishes, change over time. We provide ongoing support and years of experience to help navigate through the waters of estate planning.