Estate-planning end game: Wealth strategist Tyler Cuba offers guidance to help avoid outliving your assets

Tyler Cuba poses for a photo in his office at Cuba Financial Group. (Glenn Landberg)

Tyler H. Cuba is a certified wealth strategist at Cuba Financial Group in Cape Girardeau, creating comprehensive financial plans for clients to help them protect their wealth. Cuba essentially serves as chief financial officer for his clients, and through a five-step consultative process, develops for them appropriate wealth-management solutions, including the significant component of estate planning. He holds a degree in finance from St. Louis University. We asked him to share his expertise.

TBY: What is your fundamental definition of estate planning?

Cuba: Estate planning can be defined as doing what is necessary to distribute the things you own to those whom you wish to have them. A person might want this distribution to be at their death or disability, or possibly before either of those things occur. It might include legal documents, titling of assets, tax planning, gifting, charitable considerations, planning for the financial and physical care of loved ones, etc. This planning needs to be done before your death to ensure your wishes are implemented.

TBY: At what age should an individual establish an estate plan?

Cuba: Estate planning is not necessarily an age-based decision. It should be done by anyone who has titled assets or financial dependents and responsibilities. It is an ongoing process and should be reviewed periodically to be sure it accurately reflects what the individual would like to see happen in the event of their death or disability.

TBY: If one is planning to leave everything to a spouse or another individual, is estate planning required? Could they just write their own will?

Cuba: The state has an estate plan in place to distribute your assets and deal with your financial responsibilities at your death if you have not provided one or if what you have done is deficient. The state plan may not be the one you would have preferred, and it may be costly. Leaving things to a spouse or another individual can be done through specific titling of your assets, beneficiary and Transfer-on-Death (TOD) designations, etc., but can result in problems in certain cases. It is important to discuss your wishes with a qualified estate planning attorney to consider all the issues that might occur in your specific situation.

Books rest in Tyler Cuba's office at Cuba Financial Group. (Glenn Landberg)

TBY: Some people fear they will outlive their savings. How can one calculate how much will be needed?

Cuba: It is important to be planning your retirement at an early age and continually be monitoring it. Many things can impact that plan, such as inflation, your health, longevity, defining your needs versus your wants, your spending habits and patterns, the rate of return on your assets, unexpected expenses and life changes, your plans for earned income in retirement, etc. As you advance toward that retirement date, you should be updating these variables and projecting their impact upon your plan.

TBY: What is the difference between a will and a living trust?

Cuba: A will is a legal document detailing your wishes at your death. It does require a public probating process and involves probate court and legal fees to administer your directives. A living trust also details your wishes at your death, but does not require the public probating process and thus can be less expensive to comply with your wishes. A living trust is more complex, but can significantly reduce the tax and legal costs at your death.

TBY: Why are living trusts coming into greater use vs. wills?

Cuba: People's understanding and knowledge of living trusts are resulting in a greater use of them. The primary attraction to their use is the avoidance of the time and expense of probate, privacy and the potential reduction of estate taxes.

TBY: What is the benefit of having a corporate executor or trustee versus having an individual executor or trustee?

Cuba: Administering a trust can often require time, talent and knowledge that an individual trustee might not be able or willing to devote to it. Oftentimes a trust might be in place for years after the death of the creator of the trust and require accounting and tax filing, dealing with the beneficiaries of the trust, etc., and a corporate trustee might be the better option in these situations.

TBY: What is the purpose of a beneficiary deed?

Cuba: Beneficiary deeds are state-specific documents. A Missouri Beneficiary Deed is simply a real estate deed that allows a deceased individual to pass their ownership interest in Missouri property to named beneficiaries listed on the deed, thereby avoiding the probating process. Care needs to be taken to meet the legal requirements of the specific state statute to be effective in accomplishing this transfer.

TBY: What would you advise someone who intends to draw Social Security at age 62 instead of 65, 66, or 67? At age 62, they could live on Social Security and perhaps not touch their retirement accounts for a few more years.

Cuba: First, it is important to understand that Social Security Administration personnel are neither trained nor allowed to advise individuals on claiming strategies. Subsequently, it is even more important to understand that smart claiming strategies can have a significant impact on your retirement. I would advise all individuals to seek an adviser who understands the strategies available to optimize your retirement benefits based on all aspects of your retirement plan. Social Security benefits should not be analyzed in a vacuum. For example, with our understanding of the complexities of Social Security, we provide our clients with a comprehensive Social Security analysis and strategy plan that details exactly how they should take their Social Security income -- including specific steps and at what ages -- based on the analysis we have done on their entire financial situation.

TBY: What does it cost to retain the services of an estate planner?

Cuba: The costs are typically a function of the complexity of the individual situation. Simple situations are not expensive to plan, but more complex situations may require the expertise of several professionals with different skills and knowledge. The thing to keep in mind is the benefit compared to the cost when considering any financial decision.

TBY: What are qualifications one should look for in an estate planner?

Cuba: Qualifications of an estate planner should include a trusted and knowledgeable individual as well as one who communicates well with you, listening and advising you in a patient and understandable way on the positives and negatives of any estate strategies you might consider. Estate planning is a complex field, oftentimes involving more than just a will or a trust. In many cases, working with a planner who is able to bring together the appropriate professional experts to preserve your estate is essential.