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Legacy: Well executed plan vs. a plan with holes

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The unexpected is what can cause your financial plan to upend in ways you never imagined, at least without proactive planning. Nine times out of ten, new clients who sit down with our team have not completed their estate plans, do not have adequate insurance coverage, or have planned against the need for extended care for themselves or their spouses/partners.

I want to take you on a journey with a few individuals who experienced planning and not planning in these areas. As a reminder, these are individual scenarios. Your wealth is personal and should be planned for your personal wealth vision and legacy planning.

When Planning Does Not Go the Way You Thought it Would.

For purposes of this story, our clients’ names are William and Abigail. They had done some advanced planning with their attorneys as they have a complex wealth picture. They had established a trust and had long-term care insurance; however, they had not properly titled their assets in the trust per their estate planning attorney and wealth management team. Abigail was receiving care for her journey with Alzheimer’s, against which she eventually lost her battle. William met with his team and they reviewed changes that needed to be executed on the titling of assets in order to avoid large taxation when he passed on. He did not execute these. In turn, because he’d omitted this step when William passed away, his daughter Angela discovered assets that were not correctly titled, having to file tax returns that were never filed resulting in tax penalties, and taxes owed that drastically reduced their estate. Angela, who lived out of state, had a family of her own, and a rigorous career. She now had a full-time job settling her family’s affairs which she’d were in order. Executing a plan is as important as drafting the documents. If you do not follow through on them, well…you have truly paid for an incredibly expensive stack of papers. 


Fully Executed Wealth Vision and Legacy.

On the flip side, let me introduce the following scenario in which a family did extensive planning, had great communication, and took immediate action allowing their wealth vision to come to fruition. Again, we have changed the clients’ identities and a few pieces of the story for this client scenario to protect their privacy. Leigh is in her mid-fifties and has been a caregiver for both of her parents who are both now deceased.

In addition to caring for them she has a flourishing career. She and her parents were proactive prior to their death and ensured that their wealth vision was executed as planned. They had applied proactively for insurance coverage for each parent and for Leigh. They wanted to be able to protect their legacy while also making an impact for their family and community through philanthropy and gifting. Titling of their assets had properly been put either into trust or ownership by Leigh, per their estate planning instructions. Upon the passing of Leigh’s parents, although complex, their wealth vision was able to be executed. Leigh now can preserve their home as her current residence, and have another warm weather location to travel to. Leigh was able to execute the plan for making large philanthropic gifts to the nonprofit organizations she and her family supported. While not able to avoid taxes completely, Leigh was only required pay what was planned for and no more. Not only that, now Leigh will be able to decide how to proceed with her career and maintain her decision to keep working, take a sabbatical, or pivot to a passion project because she has the wealth freedom to do so.

As a driven professional with a high net worth, you have worked hard to achieve financial success and build a solid foundation for your future. However, it is important to ensure that your legacy is protected and your loved ones are taken care of after you pass away. Estate planning is a crucial aspect of financial planning for female executives with a high net worth. Below we will break down why estate planning is especially important for you and the action items you should take.

Why is estate planning important for female executives with a high net worth?

  1. Protecting your assets: As a female executive with a high net worth, you have likely accumulated a significant amount of assets throughout your career. Estate planning can help protect those assets and ensure that they are distributed according to your wishes.
  2. Ensuring your legacy: Estate planning allows you to create a plan for how your assets will be distributed after you pass away. This can ensure that your legacy is preserved and that your loved ones are taken care of.
  3. Minimizing taxes: Estate planning can also help minimize taxes on your estate, allowing you to pass on more of your wealth to your loved ones.
  4. Designating guardianship for children: If you have children, estate planning allows you to designate a guardian for them in case of your untimely passing.
  5. Establish a communication plan: Importance of keeping the individuals who will be responsible for your estate or decision making while you are unable is key to your vision staying intact. 


Action items for female executives with a high net worth

  1. Meet with an estate planning attorney: Working with an experienced estate planning attorney can help ensure that your estate plan is comprehensive and tailored to your specific needs and goals. Remember, that you would not ask a brain surgeon to operate on your heart. Please choose an attorney with a specified specialization in estate and elder law. 
  2. Create a will: A will is a legal document that outlines how your assets will be distributed after you pass away. It is important to create a will that is specific to your unique situation.
  3. Consider a trust: A trust is a legal arrangement that allows you to transfer assets to a trustee, who manages the assets on behalf of your beneficiaries. Trusts can offer a number of benefits, including avoiding probate and minimizing taxes.
  4. Review your beneficiaries: Review the beneficiaries on your retirement accounts, life insurance policies, and other financial accounts to ensure that they align with your wishes. 
  5. Review titling of real estate: In the state of Minnesota, you can now name a direct beneficiary on your real estate avoiding large assets having to go through probate. 
  6. Plan for incapacity: Estate planning can also include documents that specify your wishes in case of incapacity, such as a durable Power of Attorney or Advance Healthcare Directive.

By taking the necessary steps to create a comprehensive estate plan, you can protect your legacy, minimize taxes, and ensure that your loved ones are taken care of after you pass away. Working with a financial advisor and estate planning attorney can help ensure that your estate plan is tailored to your unique needs and goals.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision.


Community + Connection 

We want to leave you today with upcoming opportunities that we have for you to connect with like-minded people and grow in your wealth journey. Join us at the end of April to discuss the topics of life insurance, caregiving, and death. We will have a panel joining us. 


Wealth Circle: Life, Caregiving, and Death 

IN PERSON – Thursday, April 27th from 5:30-8:30pm at Modernwell Co-working Space (Forethought Planning HQ)

Granddaughter putting on shoes of grandmother

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