WHY YOU NEED A FINANCIAL PLAN AND AN ESTATE PLAN

By Cory Howes

coryIf you want to leave a robust financial legacy for your family, a financial plan alone is like trying to guide a boat with just one oar. It’s only part of the big picture for your overall monetary health. A well-informed financial plan is worth your time for several reasons, but let’s look at how financial and estate planning can work in tandem to create the best possible future for you and your family in the years to come.

What’s included in a financial plan

Financial planners take stock of an individual’s fiscal landscape and come up with approaches to maximize his or her overall financial well-being. For example, a couple of young professionals in their late twenties have found a successful career track after graduating with their bachelor’s degrees, and now, with the addition of two children, they want to buy a house.

Before they can take such a big leap, the couple tracks down a skilled financial planner who will take an honest look at their foreseeable cash flow and her spending and saving habits. People from all walks of life use financial planning to ensure that they’re in good shape for making big purchases, saving for their children’s education, and ensuring a comfortable retirement. All of these goals are coming into focus for our young couple, and working with a financial planner can also help them to develop an investment portfolio, which the financial planner monitors and manages.

But financial planning only goes so far. To have a comprehensive approach, our young professionals also must also consider their estate and the wills and trusts they should put in place, so their assets go to protect their children’s future. That’s where an estate planning attorney comes in.

What’s included in an estate plan

Estate planning attorneys are lawyers who give sound advice about what will happen to a person’s assets if he or she becomes mentally incapacitated or when he or she dies. Knowing that what you pass on to your family will be legally protected lets you focus on enjoying the best things in life without worrying about your loved ones’ futures. Estate planning includes defining how you want your loved ones to benefit from the financial legacy you leave behind, implementing strategies to protect your assets from creditors down the road, providing a framework so your loved ones can make medical decisions on your behalf when you can’t, evaluating approaches to help you reduce estate taxes, and more.

At the end of the day, your attorney should be a teacher. He or she should be equipped to identify the issues that are relevant to you and your family, and clearly explain your legal options. Even though estate planning can be highly technical, your professional bond with your attorney can and should feel like a friendly partnership since it involves taking an honest look at many personal wishes and priorities. There is no one-size-fits-all estate plan, so choose an attorney whom you trust and enjoy working with, one who is responsive to questions and needs.

While financial planning will help our young professionals get from point A to point B (as well as C, D, and beyond) with some pretty big money milestones, they now know that they need an estate planning attorney to make sure their wishes are carried out and her money stays in the right hands—their growing family’s.

How these two efforts work together

There are several ways these two components of your financial wellness work in harmony. Asking your financial planner and estate planning attorney to collaborate is common practice, so don’t be concerned that what you’re asking is outside their regular scope of work. Knowing who else advises you will help both parties get the information they need do their jobs at peak effectiveness. For example, your estate planning attorney may prepare a living trust for you, but your financial planner may help you transfer certain assets into that trust.

What are you waiting for?

If you already have a financial planner and are thinking about working with an estate planning attorney, you’re in an excellent position. At the Forrest Firm, we can often collaborate with your advisor to begin working on your estate plan. This might save you time and money, as we’ll get up to speed with the help of your financial planner.

The right time to plan your estate is right now. The sooner you put yourself and your family in a position to rest easy knowing a solid plan is in place, the better. And now that you know your financial plan is a wonderful start—but not a complete solution—you’re ready to take the first step on the path to total financial security.

Please feel free to contact me today to complete your planning with an estate plan tailored to your needs.