By Wayne Baller, Baller Financial Group of Wells Fargo Advisors
I have become a big advocate for helping families with Alzheimer’s issues because my Dad died from Alzheimer’s. As an attorney (no longer practicing), and financial advisor, I had managed to help my parents get all of their estate investment planning done well in advance of the time it was needed. In fact, about 15 years before he died, my Dad said, “Why do I need to do this? I’m not going to die.”
Contemplating our own demise isn’t the happiest subject for us to think about, yet it is
important to get it done. A client of mine calls our Team his “forcing function” because
we got him and his wife across the finish line with their estate investment planning.
There are two main issues to keep in mind when you think about estate investment
planning: where do I want my assets to go, and who do I want to help me, both before
and after I am gone.
FIVE KEY DOCUMENTS TO CONSIDER
There are five key documents everyone should consider using: Will, Financial Power of
Attorney, Living Will, Health Care Power of Attorney, and Revocable Living Trust. Let’s look at the function of each one.
Your Will names an executor to settle your affairs, and says where you want your assets
to go. PLEASE NOTE THAT IF YOUR’ ASSETS PASS THROUGH YOUR WILL,
PROBATE WILL BE INVOLVED. Probate is one (but not the only) way of distributing
your assets. Probate is expensive, time-consuming, public, and involves loss of control.
(See Revocable Living Trust, below.)
Your Financial Power of Attorney names a trusted person (and ideally, in series, a
number of trusted people), to manage your affairs in the event you become unable to do
so. It is key to name only people you have utmost confidence in, as they will be able to
do virtually anything you could do, by signing your name to legal documents. Your
Financial Power of Attorney terminates on your death. The reason for naming more than
one person is in case someone is unable or unwilling to serve for you. People should be
named as alternates or back-ups, not as co-power-of-attorneys, in most cases, in order to
make decision-making smooth and easy.
Your Living Will tells doctors, hospitals and other health care providers what things you
want and don’t want to be performed in end-of-life situations.
Your Health Care Power of Attorney designates a trusted person (again, ideally more
than one person in series) to give instructions to health care providers. In many states the Living Will and Health Care Power of Attorney are statutory forms that simply require you to fill in the blanks.
Many people also use a Revocable Living Trust (RLT), and sometimes other trusts, in
their planning. A RLT bypasses probate, as long as ASSETS ARE TITLED IN THE
RLT. Other ways of bypassing probate include Joint Tenancy with Rights of
Survivorship; assets set up as Transfer on Death or Payable on Death; and beneficiary
proceeds (life insurance, annuities, and IRA’s). The benefit of a RLT is that your
Successor Trustee can make decisions for you while you are still alive (and not able to do
it yourself), and also after you are gone. Again, we like to name a series of people to
serve individually, not as Co-Successor Trustee. After your death, the Successor Trustee
will carry out your wishes as expected in the RLT as to where you want your assets to go.
Remember, the RLT avoids probate. We also like to see an “ultimate backstop” named as
Successor Trustee, usually a Corporate Fiduciary, in case none of the named people can
COMMON PITFALLS TO AVOID
Pitfalls do abound, so make sure you work with experienced professionals. Examples of common pitfalls include: doing no planning and having no documents which lead to your assets passing under state law; attempting to “do-it-yourself” and having a court declare it invalid; naming more than one person to serve at the same time, making decision-making difficult and hard to manage; having an attorney draw up a RLT and failing to re-title assets into the RLT, thereby still being involved in probate.
MORE ABOUT THE BALLER FINANCIAL GROUP
Wayne Baller is Managing Director-Investments, and Team Leader of Baller
Financial Group of Wells Fargo Advisors in Dayton, Ohio. With his two sons David
Baller, Vice – President, Financial Advisor and Steven Baller, Financial Advisor,
Wayne serves a select group of client family relationships nationally. We can be
reached at 937-224-8201.
Any third-party posts, reviews or comments associated with this listing are not
endorsed by Wells Fargo Advisors and do not necessarily represent the views of
Wayne Baller or Wells Fargo Advisors and have not been reviewed by the Firm for
completeness or accuracy.