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A MULTIDISCIPLINARY APPROACH TO PLANNING

Estate Planning | Tax Strategies | Financial Planning


Why Estate Planning is Part of Wealth Management

| February 03, 2020
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The goal of wealth management is to grow, protect, and transfer wealth. Meeting these goals requires a combination of financial planning, legal and tax advice, investment management, and estate planning. Some may think that having a retirement plan such as a 401K or IRA or investment and savings accounts might be enough. But correct wealth management is an all-encompassing approach to planning your financial future, including your estate plan. Among other things, managing your estate means asking hard questions like “if I was unable to manage my financial affairs, what would tomorrow look like for my heirs?” A comprehensive estate strategy includes clear directions for end-of-life eventualities, along with how to distribute your wealth after death.

Estate planning can sometimes feel like the “elephant in the room.” Defining and setting up instructions about how to manage your property and assets during your life and in the event, you are unable to care for yourself can be an emotional process. It may begin with composing a will and/or setting up a trust, but doesn’t end there. Common assets included within estate planning are financial accounts, money owed (tax refund), real estate, and other high-value assets. It will affect your overall financial strategy and includes aspects of tax management and medical planning. There will be some difficult choices, but every decision made by you is one less made by someone else.

The definition of “wealth” tends to differ significantly from one person to another. That may be why over half of adults in American do not have a will - they haven’t taken the time to do it or think they don’t have enough assets to warrant making one. Those that die without a will in place will have died “intestate.” Their property goes to the State for distribution. 

The guidance of an advisor specializing in estate planning removes the ambiguity of who receives what, when, and how. No one wants a lifetime of assets to be divvied up by the State. Formally designating your healthcare and financial wishes before your death removes any doubt on the handling of your estate (and who will make decisions on your behalf).

The fundamental objective of estate planning is to ensure there is no uncertainty with the distribution of assets, probate, and to maximize your estate’s value. Regardless of the dollar value assigned to your property and assets, everyone needs to plan their estate. People often overlook considerations without proper guidance and direction, like whether you can reduce probate costs or inheritance tax. An adviser can help you navigate the legal complexities involved and help oversee the transfer of wealth to your loved ones.

Estate planning will likely be the most emotional part of defining your wealth strategy. Don’t let that stop you. The process of building, protecting, and managing wealth is a long-term one. With a holistic approach to planning and an established adviser relationship, your wealth can leave a lasting legacy enjoyed by future generations.

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