Enhanced Planning: Not only for the wealthy

Tuesday, March 7, 2023

According to Investopedia, by definition, estate planning is the preparation of tasks that serve to manage an individual's financial situation in the event of their incapacitation or death. I get it: No one wants to think about dying, let alone the process of distributing their collection of assets. In my experience, many people think this process is an elaborate plan that is expensive, and they don’t really need it.

The fact is, everyone needs a plan to deal with their income, assets and wishes dealing with those assets and relationships at either incapacitation or death. We call this “enhanced planning” and like to add the subtitle of “protect your legacy and preserve family harmony.” In this case, I’m using “legacy” less as a way of talking about a financial legacy and more as a way of talking about your emotional legacy: How are you remembered by your family and loved ones? Did you do the things you needed to do to help preserve family harmony after you’re gone?

There are a few questions to ask as you think about your part in the process. You cannot plan for your estate if you do not know who owns what. You will also need to know how you own it. When I sit down with clients and start asking questions like, “Who owns what?” they often begin thinking about other things they may not have thought of before, like, “What about that land that you and your siblings inherited from Grandma and Grandpa — who owns that?” If you don’t know who owns what, you won’t know who gets what, and, more importantly, what the tax implications are.

This process can vary depending on your level of assets, but at the end of the day, you should seek the advice of an attorney to help you determine what you need, and then work with your financial advisor to help implement that plan.

Advisory services are offered through Innovative Financial Planners, LLC, an Investment Advisor in the state of Missouri. Insurance products and services are offered through Innovative Insurance Consultants, LLC, an affiliated company.

The information contained in this article have been derived from sources believed to be reliable, but is not guaranteed as to accuracy and completeness and does not purport to be a complete analysis of the materials discussed.