Estate Planning Basics

In this video, we’re going to explain the importance of estate planning and how EWA is able to help quarterback decisions, updates, and making this part of a regular review process for your plan moving forward.

One of the partnerships that we’ve created with EWA is a technology company called Vanilla Estate Planning. Vanilla Estate Planning was made specifically for financial advisors to help advise their clients specifically on estate planning.

This company allows us to evaluate and recommend any changes on existing documents that you have, such as a will, trust, power of attorneys, et cetera. This does not cost you anything, as we pay Vanilla a retainer fee, and if you send us your current copies of documents, we’re able to upload that and they’ll create an easy to understand flowchart.

We’ll bring that to you and that’ll help us evaluate if any changes should be made. If you don’t have any of these documents created, they charge a flat fee of $1,500. And we found this is very competitive with and often under what you would pay an actual attorney in your area.

They have all of the questions and decisions you have to make in the state plan that you upload online, and then that gets sent to an attorney who you meet with over a virtual call, who then finalizes the documents and sends them out for your final approval.

Get a notary to stamp it, and then it’s signed, sealed and delivered. Now, the tremendous thing about this arrange is the documents are able to live on our platform, so we’re able to include them as part of our regular reviews with you and any updates or changes.

For an example, if a trustee were to pass, God forbid, to update your trust, to update your will, they charge a flat fee of $100. And we found this is extremely competitive. In relationship to what you would pay an attorney face to face to create or update a document.

Some of the things to think about why do you need a will? Why do you need a trust? Why should you have a regular review of beneficiaries? Well, the biggest concerns we have is someone who has a will, and they think the will spells out exactly what their intended wishes are.

From a beneficiary perspective, the beneficiary of a 401, if it’s fill in the blank beneficiary and that’s different than what your will states, the beneficiary that’s directly on your 401K will trump whatever your will states.

You may say think that your will is in aligned with your wishes. But if you have a beneficiary arrangement, that’s different. In most states, the beneficiary designation will always win. So it’s very important to review and make sure that these documents coincide and agree with each other.

Another document we highly recommend is a Revocable trust. Sometimes in the irrevocable trust. For most of our clients, a revocable trust makes sense when you have kids or you’re retired. Revocable trust allows you to maintain your wishes when you’re not here in order to make sure that the money and your wishes get passed along privately within your family.

If you don’t pass within a trust in most states, it will become a public document, and creditors or people that are interested in your kids finances will have public knowledge of what they just received.

A trust really secures the privacy. It avoids probate. It makes the process quick and efficient. In the unlikely event of a premature passing, some of the questions you’re going to want to ask or discuss among yourselves are who would we want taking care of our kids?

Who are going to be the guardian? Who’s going to be the executor? Who do we want making decisions if you’re incapacitated or if you’re not here? And then if you do establish a trust, who do you want as the trustee?

Sometimes it makes sense to have a corporate trustee. Fidelity is actually able to do this and they’re able to take the heavy lifting of the tax returns of the trust. We’re able to be the investment managers and Fidelity will work with us so there’s no increase in any kind of fees for your beneficiaries.

Having a corporate trustee alongside with a potential sibling or family member makes sense because a family member is going to be taking care of the kids in the day to day and the company will be making sure that the finances are continuously growing and reaching the goals and the security of your children or beneficiaries.

So, some things to think about. We’re going to send an outline with what steps to take in order to get these documents reviewed or in some cases, in order to get these documents created from scratch.

Look forward, including this as part of your overall comprehensive financial plan and please let us know if you have any questions.