The Art of Estate Planning: Where There’s A Will, There’s A Way
By: Lorri Gifford
Always plan ahead. It wasn’t raining when Noah built the ark. ~Richard Cushing, novelist
My intention for this month was to write about Life Insurance. I started out by making an appointment and meeting with Boyd Phillips one morning at a local Starbucks. Boyd Phillips is an agent licensed to sell insurance and is a Registered Representative of and offers securities products & services through NYLIFE Securities LLC, Member FINRA/SIPC, a licensed insurance agency. He is also separately registered as an investment adviser.
My original thought was to interview him and gather knowledge about Life Insurance. In the process of interviewing him, I asked if he would put me through a typical interview he conducted with a potential client so that I could write from that point of view. We made arrangements to meet the following week at his office to finish the process.
I promise to focus solely on the topic of Life Insurance in one of the coming months. But I digress, let me share with you what happened to me the morning I drove my car out to the little town of Marion.
I drove into town and parked in the parking lot next to his building. As I walked in I was greeted by Cindy, his “Girl Friday” and led back to the conference room. Boyd entered the room carrying a packet of papers encased in a clear report cover.
I sat down and Boyd started asking me questions about every aspect of my life. Before we could decide on the type of Life Insurance that was best suited for me he wanted me to be educated about “Estate Planning.” It was here, dear reader, that the subject of the article spontaneously changed. Because if you are like me, you may not realize how many interlocking pieces come together so that the mechanism of an Estate Plan can flow smoothly.
Estate planning is the process of arranging for the dispersing of your property, belongings and monies upon your death. I know, not a pleasant topic of conversation but a necessary one. A good Estate Plan basically insures that your wishes are followed regarding who gets what and when.
Create a definite plan for carrying out your desire and begin at once, whether you’re ready or not, to put this plan into action. ~Napoleon Hill
Meanwhile back in Marion…
Boyd began by asking me the standard questions in order to fill out my form: name, birthdate, occupation, marital status, etc. For the purpose of this article I will share that I am in my forties, single, work full time as a massage therapist and have a side business of Coaching and Tarot reading. (I also enjoy writing in my spare time.)
The next set of questions I was asked centered around my parents. Were they living or deceased? (My mother is deceased and my father is living.) How old was my father? How was his health? Was he dependent on me for support or was there a possibility of inheritance? Those were the questions I got to ponder half way through my morning cup of coffee.
We then delved into the details of my current “Estate planning documents.” OK, here is where I come clean and admit that I currently have none. At this point, Boyd stopped to explain that the preliminary step to Estate planning is having a will in place. Each time I had a question Boyd was compassionate and encouraged me to ask more. I felt totally comfortable learning from him rather than feeling judged for my ignorance.
Did you know that in the state of NC if a person dies without a will (called dying intestate) the state determines the allotment of the Estate? Read the excerpt below:
Per North Carolina Bar Association:
Some North Carolinians, perhaps overwhelmed by the complexities of estate planning, simply ignore the problem and hope it will go away. But, unless you develop an estate plan, it is possible that your property will be divided among surviving family members contrary to your wishes. Why? If you do not have a will, your property will be divided according to state laws.
These laws are referred to as the North Carolina Intestate Succession Laws. When a person dies without making a will, he or she is considered to have died intestate, and the property is divided among the surviving heirs according to the rules of intestate distribution. Certain kinds of property, such as proceeds of insurance policies with designated beneficiaries, IRAs, and property owned jointly with survivorship rights, are not affected by these laws.
If you have any further questions check out the following link or consult your attorney: www.ncbar.org/download/planningYourEstate/no_will.html
Did you also know that only about 30% of Americans have a will and about 1/10th of those keep them updated?
Forewarned, forearmed; to be prepared is half the victory. ~Miguel de Cervantes Saavedra, Spanish writer and author of Don Quixote
Once you are done formulating a will, it is time to decide whom you will grant Power Of Attorney to. It is important to put Power Of Attorney into place regarding your estate and your health. Choose a person who can make decisions on your behalf should you become incapacitated.
The third and final preliminary step in Estate Planning is to prepare a living will. This document can speak for you by outlining the medical procedures you want taken if you become too ill to state your wishes yourself.
During this process there are also three essential people that you will need to have on your team: a CPA, a Financial Advisor and an Attorney. It is important that the three of you communicate well with and among each other.
Another issue that you may want to research and consider is a having a Long-term health care plan. Let’s say that an individual gets into a car accident and ends up paralyzed from the neck down. Having a Long-term care plan in this case would be extremely helpful. Often when a need for long-term care arises, an individual typically goes to each of their reserves in the following order: savings account, IRA or retirement funds, business interests, home equity or real estate.
A Long-term care plan can protect the estate and become the first line of defense if a need should arise.
With all of these things whirling in my head I began to see that I needed a plan and a path to follow. When I asked Boyd for suggestions based on my interview these are the three action steps he encouraged me to focus on (Once that I have a Will, POA & Living Will set up of course!):
First step: focus on my retirement plan and contributions. Set up a plan and formulate the amount of money I want to put away on a monthly basis.
Second step: Explore my protection needs: Life Insurance
Third step: Explore and research Long-term care planning
Whether you are just beginning down this road like I am or you have already put an Estate Plan in place, the Estate Planning Checklist below can help you fine tune your preparation:
ESTATE PLANNING CHECKLIST:
-Make or update your will.
-Allocate powers of attorney for your estate & your healthcare.
-Make a living will.
-Create a letter of instruction for your survivors to follow. It can spell out funeral wishes, people to contact, financial account information and where your will and other important papers can be found.
-Determine your net worth, including life insurance proceeds. Consult your CPA and Attorney when necessary.
-Establish a Trust if appropriate.
-Consider funeral pre-planning.
-Make arrangements for the orderly transfer of business assets.
-Consider, buy or update your life insurance.
-Consider Long-Term Care Insurance
-Make a list of all of your accounts and passwords.
-List the location of valuable documents: deeds, car titles, birth certificates, etc.
-List your personal data: Social Security number, driver’s license number, VA claim number, date of birth and the names and phone numbers of family members.
-Make arrangements for access to your safe-deposit box.
-List loan payments. Including information about credit cards, mortgages, and any outstanding loans.
-List other income sources and government benefits.
-List the location of tax records.
-Verify beneficiary designations.
-Provide a trusted family member or friend with the location of confidential or valuable items, location of spare keys and security codes.
-Provide easy access to your will and your durable powers of attorney. Keep original copies in your attorney’s office, a copy at home and give a signed copy to your executor.
-Provide the name of your veterinarian and care instructions for pets, if appropriate.
After the interview I realized how much I truly had to digest and I was grateful for the knowledge and time that Boyd shared with me. During the interview he gave me examples from his own life regarding the choices he and his wife had made. I even got to see a picture of his four beautiful children. He made the interview process effortless and easy for me. And, his graciousness didn’t stop there, being a true southern gentleman, Boyd treated me to lunch at Bruce’s Fabulous Foods in Marion and introduced me to the owners. (On a side note, if you’ve never been, GO!!!)
When I drove out of Marion I left feeling heard and well educated. Boy do I have some work ahead of me. Stayed tuned in the coming months as I go into detail about some of the issues listed above as well as other financial topics.
We make sure that the path you are on stays true to the course you’ve set. ~Boyd Phillips
Lorri Gifford has been reading Tarot Cards since 1986. While living in California, she worked at The Chopra Center for Well-being as their Spa Director and a Lead Educator. In 2009 her intuition guided her to move to Asheville. Lorri enjoys writing, giving readings, coaching and helping others develop and deepen their intuition. She can be reached at www.readingswithlorri.com or 828.505.4485