Guest Post: Estate Planning Is Not Just For The Ultra-Rich Anymore

Estate Planning Is Not Just

For The Ultra-Rich Anymore

Hollywood’s stereotype of estate planning usually features assorted nieces, nephews and cousins gathered in the drawing room of a 100-year-old mansion greedily waiting to hear what an eccentric rich relative left them.

By the time the scene is over, no one is happy – and that part, at least, has some veracity.

"Thousands of people fight over money every year after someone has died, especially if that person did a poor job of planning what would happen with their assets," says Ernie Burns, president and chief executive officer of Burns Estate Planning and Wealth Advisors (www.burnsestateplanning.com).

But families don’t have to be rich to get in an uproar over who should inherit what. And unfortunately, the average person doesn’t show the same kind of concern about estate planning that the rich do – and that’s a mistake, Burns says.

"People often think, ‘Well, I’m married so everything will just pass along to my wife or my kids,'" he says. "But it doesn’t always work that way. For example, in some states your brothers and sisters could possibly inherit part of your estate, even if that wasn’t your intent."

That’s why everyone – regardless of how small their wealth – should do at least some estate planning, Burns says. Some things to consider, he says, include:

• A will.

This is the most basic of estate-planning documents, yet a Caring.com survey this year showed that more than half of Americans don’t have a will. "A will can provide certainty and clarity and eliminate the grey areas when property is moving from one generation to the next," Burns says. "Don’t just assume everything will end up with the people you want it to if you fail to leave specific instructions."

• A trust.

Not everyone needs a trust, but it often makes sense. "Basically, a trust allows you to control your assets from the grave," Burns says. "You can set certain restrictions, which is especially helpful if your kids are young or they don’t really manage money well. That way you may be able to keep them from blowing their inheritance all at once." For example, a restriction might be that they don’t receive the money until they earn a college degree.

• Power of attorney.

It’s important to assign someone power of attorney so that if you become incapacitated that person can speak on your behalf and sign important documents. You can also have a living will to outline your wishes, which could help your family make tough decisions about your healthcare.

There are online services that can prepare a will, Burns says, but that may not be the best route.

"Laws and rules are always changing," he says. "So it’s better to consult with a professional who understands all the nuances."

About Ernie Burns

Ernie Burns, president and chief executive officer of Burns Estate Planning and Wealth Advisors (www.burnsestateplanning.com), has more than 25 years’ experience in retirement income planning. He is an Investment Adviser Representative, and also is a Master Certified Estate Planner (MCEP) and a Million Dollar Round Table-Top of the Table Member (MDRT). Burns also is host of Total Retirement, a 30-minute television show. He has been published and/or quoted in Fortune Magazine, Entrepreneur Magazine, Money Magazine and Bloomberg BusinessWeek. Burns Estate Planning and Wealth Advisors is now the "Official Wealth Management Firm of Southeastern Athletics" for Southeastern Louisiana University.

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Guest Post: 3 Strategies To Increase The Value Of Your Financial Legacy

3 Strategies To Increase The Value

Of Your Financial Legacy

After a lifetime of accumulating money, it’s common to start thinking about your legacy and what you want to leave to your children, grandchildren or a favorite charitable cause.

But despite the dollar signs you see on your investment and bank accounts, there’s no guarantee your loved ones or your chosen charity will get the full amount.

Uncle Sam is lurking to snatch a sizable share.

"It’s important to plan carefully if you want to make sure that as much of your money as possible goes to the people or organizations you choose," says Rich M. Groff II (www.TheMoneyMD.com), a third-generation Certified Financial Planner.

"It’s very easy for someone to think they’ve covered all the bases, when in reality there are potential pitfalls they didn’t know about or didn’t count on. The good news is that there are plenty of options people can consider that will allow them to leverage those gifts so that the person or organization receiving them gets the maximum amount possible."

Groff says just a few of those options include:

• Leverage your IRA to increase your legacy.

When you leave a traditional IRA to your loved ones, they pay a hefty tax. But there are ways to eliminate – or at least mitigate – the tax bill, Groff says. For example, you could use some of the IRA money to buy a survivorship universal life (SUL) insurance policy that would pay enough to your beneficiaries to offset the amount of the taxes. "There are additional ways using an SUL where you can eliminate the taxes, give to charity and still increase what your loved ones receive," Groff says.

• Make a charity your life-insurance beneficiary.

People usually think of naming a spouse or a child as the beneficiary on a life insurance policy, but the money doesn’t have to go to an individual, Groff says. You can direct that the policy be paid to a charity instead. The main downside to this approach is that there’s no income-tax advantage for you.

• Donate your life insurance policy.

This strategy does come with some tax advantages, Groff says. Giving a life insurance policy to a charity as a gift can provide an income tax deduction now, and can significantly reduce the taxable estate of the person who made the donation when that person dies. The charity, meanwhile, receives the full face value of the policy.

"Many people have a good idea who they want to benefit from their financial legacy," Groff says. "They just don’t always know how to make it happen. But if they lay out all their wishes to their financial professional, he or she should be able to help them come up with a plan that will meet their legacy goals."

About Rich M. Groff II, CFP

Rich M. Groff II (www.TheMoneyMD.com) is a third generation Certified Financial Planner and entrepreneur. Although he has worked with people from all walks of life, he has focused his practice primarily around high income and high net worth professionals. Groff prides himself in assembling the best financial team to address and solve each individual’s needs, such as tax-reduction strategies, asset protection, legacy and business succession planning or estate-preservation techniques. He has a bachelor’s degree in business administration/finance from Central Michigan University.

  

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Guest Post: How To Decide Who Merits Your Money As You Ponder Your Legacy

How To Decide Who Merits Your Money As You Ponder Your Legacy

Not long ago, Jeff Bezos took to Twitter to ask the world for charitable-giving ideas.

The Amazon.com founder sought a charitable strategy that looked at the long term and soon he was inundated with suggestions.

Of course, Bezos has plenty of money to give, but you don’t need to be a billionaire to reach a point in life when you start feeling the charitable urge.

"There comes a time when many of us want to do more than just accumulate money and property," says Patrick Renn (www.patrickrenn.com) a financial professional and author of the best-selling book, Finding Your Money’s Greater Purpose.

"You want to distribute the bounty. You want to enjoy what you worked to acquire, of course, but part of the change in attitude is looking to see how you can do more than just take care of yourself."

But who should your wealth – whether abundant or meager – go to? Should all of it be kept in the family when you die? Should it go to your church? A favorite charity? The college that educated you?

Ultimately, only each individual can answer that question, Renn says. But there are steps that can help you prepare for making that decision. They include:

• Be aware that circumstances change.

When you die, whatever you accumulated can end up in the hands of family, other beneficiaries, charities – or Uncle Sam. "A lot of people I talk to think they have it all worked out and that the IRS is going to get nothing," Renn says. "But often, when I examine their documents and analyze the numbers, I discover that’s not true. It’s not always because they did a bad job. More than likely, it’s because tax laws changed since they did their calculations, or something about their personal situation changed."

• Realize that fair doesn’t always mean equal.

People often divide an inheritance into equal shares. If there are three children, for example, then each gets one-third. Renn says people should sometimes reconsider the automatic urge to do that. For example, both children may be hard working, but one might be well off financially while the other is struggling to make ends meet. One sibling might be more adept at handling money, while the other will quickly blow any inheritance.

• Understand that even small gifts can help

           

Many people think that leaving something to charity is for the very rich only. But Renn says anyone, regardless of net worth, can find something they care about and include that charity, organization or cause as part of their legacy. A financial professional might even be able to help you leverage your resources so that your gift accomplishes more than you would have imagined.

"We can contribute to the greater good with our time, our efforts and our money," Renn says. "In giving financially, we are, in effect, giving all three, since money represents the fruit of our time and effort. When we share our money, we share ourselves."

About Patrick Renn

Patrick Renn, author of Finding Your Money’s Greater Purpose, has been a CERTIFIED FINANCIAL PLANNERTM for more than 35 years and holds a bachelor’s degree from in business administration from Villanova University and an MBA from Loyola College. Renn – who currently lives in Georgia – is the founder of Renn Wealth Management Group Inc.(www.patrickrenn.com), the former president of the Georgia Society of Certified Financial Planners and former president of the Georgia chapter of the International Association for Financial Planning. He is the past president of the Georgia Special Olympics, is the current chair of the Day 1 Endowment and has served on countless other charitable and endowment boards.





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