Estate Goals

What happens to your assets when you pass away should be carefully considered. Often, people can make mistakes that can hinder the estate process or worse yet, not have the result they intended. Who do you want to inherit your money? Do you have gifting goals? Do you have legacy goals? Have you reviewed who you listed as beneficiaries on your different accounts lately?

IRA or other retirement assets: IRA and qualified retirement plans will require a participant to select a beneficiary of the assets at the time the account is opened. It’s a great idea, however the beneficiary information should be reviewed on a regular basis. Oftentimes people will forget who they listed as a beneficiary on an account. Over time, your listed beneficiary could pre-decease you or maybe you went through a divorce or a relationship may have fallen out of favor. Maybe you listed “My Estate” as your beneficiary. All of these situations should be reviewed.

Retail (non tax-preferenced) accounts

Typically these accounts do not have a beneficiary attached to them, so often they become part of a client’s estate and will proceed through probate. This process can be lengthy and costly. You may want to consider alternatives that could simplify the administration of your estate.

One option is to speak with an estate attorney to draw up a trust. A carefully crafted trust document can be a valuable tool in outlining the distribution instructions for your assets. Also, depending on the wording of the trust and your marital situation, trusts can be offer tax benefits as well. We would suggest you speak with a qualified estate attorney to help you with further details on this type of document.

Another option is to add Transfer on Death (TOD) instructions to your account. Also known as Payable on Death (POD), this document outlines who the beneficiaries are for a specific account. This document can help in avoiding probate and offers the flexibility to designate one or multiple beneficiaries. Please ask your Financial Advisor about this document, but before you add a TOD to an account, please make sure you coordinate it with you estate attorney or tax professional for conflicts with any other estate plan you may already have in place.

Charitable Giving

There are a number of ways to donate part or all of your assets to charity. Your plan could be as simple as stating specific bequests within your will, trust or TOD document. More complicated estate plans include setting up a private family foundation with the help of an attorney. Family foundations have been an effective strategy for wealthy families to maintain control over assets they have isolated for charity. Before pursuing a family foundation, please consult with your accountant or tax professional. We currently help a number of families invest within and administer private foundations and can help you manage these assets within your larger investment plan.

If you don’t have a large, complicated estate, you may not want to go through the expense and effort necessary to establish a private foundation. In this case, you may want to consider donating assets to a Donor Advised Fund or a Pooled Income Fund instead. Donor Advised Funds are a way for clients to donate assets (typically appreciated assets) into a charitable fund through a fund company. Assets contributed to a Donor Advised Fund are immediately tax deductible. The donor relinquishes ownership of the assets upon donation, however the donor can retain control over how the money is invested and how the assets are distributed to charities. We work with fund companies that sponsor Donor Advised Funds and can help you implement the process.

Pooled Income Funds allow you to make a charitable gift today, avoid capital gains on any appreciated value of the securities, earn an income for life, support your favorite charities and get an immediate tax deduction. Please consult with your accountant or tax professional for further information on the tax deductibility of any donations. Once again, we work with fund companies that can assist you with any contributions to a Pooled Income Fund.