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Estate Planning

BUILDING AN ESTATE PLAN

Estate planning is much more than creating a basic will. A good estate plan is a roadmap. It can help you navigate your personal and financial goals during your life – as well as after.  An estate plan protects and provides for your family.

“Over the past 40 years of helping couples and families plan their estates, the feedback we most often hear from clients is that our estate planning process helped them accomplish far more than they ever dreamed possible.”- Porter L. “Buddy” Ozanne, President

 

Who Needs an Estate Plan

While the complexity of an estate plan may vary, every individual needs a strategy for managing and protecting their estate.

Your “estate” includes all the assets you have accumulated during your lifetime. This typically includes savings, stocks, bonds, your home, 401ks, real estate, business interests, life insurance and personal effects. If you are just starting out, you may simply focus on who will receive your assets after your death, and who should manage your estate, pay your final expenses and handle the distribution of your assets.

If your estate is larger, an estate plan will outline various ways of preserving your assets for your beneficiaries. This will also help reduce or postpone the amount of estate tax which otherwise might be payable after your death.

Peace of mind is one of the greatest gifts you can give your loved ones. The confidence you will gain from knowing you have your affairs in order to protect those close to you is one of the greatest gifts you can give yourself.

 

ACCOMPLISH THE FOLLOWING

Building an estate plan can be used to continue your legacy by helping you accomplish the following:

  • Provide for your family and those you care about in a manner consistent with your wishes and intents
  • Communicate your values and intellectual capital to share your traditions, morals and ethics with your heirs
  • Preserve the assets you have worked hard to accumulate
  • Provide peace of mind to you and your loved ones
  • Reduce the costs of attorney’s fees, probate fees, and executor’s commissions and help minimize gift and estate taxes in order to preserve more of your assets for your heirs
  • Minimize or prevent disputes and challenges to your wishes
  • Help provide funds for estate settlement expenses, debt repayment, and, if desired, educational expenses
  • Determine how and by whom your assets will be managed during your lifetime if you ever become unable to manage them yourself
  • Protect minor children from court imposed guardianships and protect and provide for special needs dependents
  • Specify contributions to any charitable causes you wish to support
  • Establish when and under what circumstances it makes sense to distribute your assets during your lifetime

Our Approach

At Probity Advisors, Inc., our goal is to help individuals understand estate planning concepts and prepare for the future. Each estate is unique, and each individual has different desires and goals. However, one thing all individuals have in common is the need to plan.

To ensure we understand your goals and can help you plan accordingly, we walk you through our comprehensive Goal Identification Questionnaire to identify your aspirations and objectives. These questions include, Who do you want to inherit your assets? Is providing for the education of your children or grandchildren important to you? Who do you want making medical decisions for you if you become unable to make them for yourself? What values do you wish your heirs to carry forward? Do you wish to make charitable contributions?

We help you identify all of your assets, including any and all investments, retirement savings, insurance policies, and real estate or business interests. We then work with you to identify how your estate needs to work for you to maintain your current lifestyle and help you achieve your goals. This requires an understanding of your current income and anticipated future income, annual expenses, current debts and obligations, anticipated retirement age and a thorough analysis of tax implications of federal transfer taxes, state death taxes and federal income taxes for your unique situation.

The Planning

After establishing your goals and gaining a comprehensive view of your financial picture, we begin to design and structure an estate plan to best meet your objectives. We will discuss a range of scenarios to help you prepare for a variety of situations that may arise. In doing so, we will discuss some or all of the following:

  • Wills and Living Wills
  • Revocable and Irrevocable Trusts
  • Durable and Healthcare Powers of Attorney
  • Life Insurance Trusts
  • Charitable Bequests, Trusts and Foundations
  • Private Annuities
  • Business Succession Planning

No two estate plans are alike. Probity Advisors will tailor your estate plan to your unique circumstances and goals.

The Implementation

An estate plan involves the coordinated efforts of not only financial planners but also legal, tax and insurance professionals. After we have completed the analysis and planning, and after we have thoroughly discussed with you all elements of your estate plan to ensure alignment, understanding and agreement, the implementation process begins. We will help you name beneficiaries, re-title any assets if needed, acquire the appropriate life insurance, create bank accounts, and help manage all other necessary pieces to execute your estate plan. We will engage an attorney on your behalf, or work with the attorney of your choice, who will ensure all legal documents are prepared properly.

The estate planning process is methodical and artful. We are here to guide you through the process with ease. A good estate plan is the best way to ensure that your loved ones are provided for, interest groups are benefitted, and that both the financial and emotional costs are limited. Probity Advisors, Inc. will work with you to ensure that all of your intents and wishes work harmoniously to achieve your desired outcomes.

never too late – or too early: EState planning for every life stage

Starting a Family

Designate guardians for children and provide for survivors.

Sarah and John Young both work and are expecting their first child. Once the baby arrives, John will become the primary breadwinner for the family. The couple has money in 401(k)s and a savings account, but their net worth is negative due to outstanding loans and a mortgage. An estate plan would provide the following:

  • Safety net to provide for Sarah and their child if something were to happen to John.
  • Plans to provide for the care of the baby in order to allow John to continue to work if something were to happen to his wife.
  • Address the tax implications related to proceeds from any life insurance that could create estate tax issues for the family.
  • Define and communicate the couple’s desires for the care of the baby, should something happen to both of them.

Building A Business

Establish a business succession plan and exit strategy.

Mr. Owen is a successful entrepreneur with no family-member successor to manage his manufacturing business if something were to happen to him. Mr. Owen has three main issues that should be addressed through careful and thoughtful estate planning, including:

  • Business exit strategy and succession planning to protect the value of his business and provide for his wife and children. In addition, this could include a Buy-Sell agreement with executives within his company that would facilitate purchase of the entire company at fair-market value, thus alleviating the burden on the family to sell the business upon Mr. Owen’s passing.
  • Wealth transfer to Mrs. Owen and the children in a manner that is cost efficient and protective of the family.
  • Plan for a myriad of potential Estate Tax issues with the co-mingling of Mr. Owen’s personal assets and his business interests in order to protect his wife and his heirs.

Change In Marital Status

Revise trust documents and beneficiary arrangements to ensure intended heirs are named and any unintended heirs are excluded.

Retirement

Name successor trustees to make decisions if you become incapacitated.

Mrs. Elder and her deceased husband drafted wills that left everything to each other. If something were to happen to Mrs. Elder today, the absence of an estate plan could lead to her assets going to Probate, a potentially expensive, lengthy and public process. Estate planning would help Mrs. Elder’s heirs avoid Probate, and would enable Mrs. Elder to communicate her desires for the transfer of her wealth in a manner consistent with her and her deceased husband’s wishes. Mrs. Elder’s estate plan might include:

  • Structuring Mrs. Elder’s estate to minimize settlement costs and emotional stress on her family by establishing a revocable living trust. Mrs. Elder could be named as the current trustee to maintain control of her financial affairs for as long as she is able.
  • Mrs. Elder could designate someone to manage her financial affairs should she become incapacitated for any reason and to manage the settlement of her estate when she passes.
  • Mrs. Elder’s estate plan would communicate how she would like to be cared for – and by whom – should she become unable to care for herself or make her own healthcare decisions.
  • A living trust can specify how her estate can be divided amongst her and Mr. Elder’s children and grandchildren, and potentially children from prior marriages.

Charitable Giving

Create a mechanism for supporting causes important to you while protecting your assets and minimizing taxes.