From Chapter 10 of Heal Thy Wealth: How Doctors Are Misdiagnosing Their Own Financial Health And What They Can Do About It. KINDLE NOW ON AMAZON: click here
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Do you really need Estate Planning?
The simple answer is yes. Any person who has income, investments, and owns real property needs estate planning. You need to ensure that if you have assets and you want those assets to transfer to the next generation, you will transfer those assets in the most tax-efficient way and at the appropriate time. For example, if there is a housing recession at the time of your passing and the family home needs to be sold, then you might want to provide some flexibility in the wording of your plan to the executor on when to actually sell the family home.
Liquidity
One of the major issues facing the executor is usually the lack of liquidity inside of the estate. If you own a number of real estate holdings, where will the money come from to pay any taxes that are due at death? What happens if the real estate market is down or the economy is about to enter a recession? Will there be buyers to purchase the real estate at fair market value or will they try to take advantage of the situation? A solid estate plan should provide the necessary liquidity and available options to the executor to enable them to deal with these issues. Life insurance is a key component of any successful estate plan. If planned properly, the proceeds from the life insurance policy avoid probate and are typically made available to the beneficiaries 10 to 12 days after the proof of the death certificate has been validated.
Your Estate Planning Team
Your certified financial planner, who is also your insurance advisor in most cases, plays a key role in helping to develop your estate plan. I usually refer to myself as the “quarterback” of the team and I work in partnership with both your accountant and your lawyer. We all work for you, the client. Accountants and lawyers will have access to information and technical expertise which your financial planner may or may not be aware of. However, accountants and lawyers will often only have a general idea of how much and what type of insurance might best fit into the plan. Included at the end of this chapter is a tool you can use to get started—the Estate Planning Questionnaire. Some clients prefer an electronic copy of an estate planning questionnaire, and this should be made available to you if you request it from your Financial Planner.
If you would like to receive an electronic copy of the Estate Planning Questionnaire, please contact my office staff and they would be happy to email you a copy.
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From Chapter 10 of Heal Thy Wealth: How Doctors Are Misdiagnosing Their Own Financial Health And What They Can Do About It. KINDLE NOW ON AMAZON: click here