August 17, 2012   Estate Planning

Why You Need an Advisory Team for Your Estate Planning


Estate planning is not simply the documents your attorney prepares, nor is it the insurance or financial plan you obtain from your financial advisor. Done properly, estate planning encompasses at least the legal and financial elements, but it may include more as estate planning often points out the need to plan for:
  • asset protection for your lifetime and for your heirs;
  • retirement;
  • providing for a surviving spouse in the event of your disability and/or death;
  • providing for a parent or a child with special needs;
  • long-term health care costs;
  • estate taxes;
  • a business succession plan at your retirement, disability and/or death that could involve a family member, business partner, employees or outside sale.
To meet your needs and accomplish your goals, it may be necessary to grow your business, increase or adjust your insurance, and manage your investments in a certain way. Instead of consulting with various professionals at different times and stages in the planning (often getting different opinions from each one), many people find they can benefit from having a team of advisors involved in the process from the beginning.
 
How a Team Approach Can Help
No one professional has all the answers, and diverse skills and experience are necessary for the best results. The team approach also minimizes time and costs—with everyone involved from planning through implementation, they can work together and hold each other accountable.
 
Who Should Be on Your Team?
Your advisory team will likely include your estate planning attorney (provides counsel and legal documents); accountant/CPA (knows your financial situation, provides bookkeeping and tax advice); insurance agent or broker (property, casualty, liability and life insurance); investment advisor and possibly a professional trustee (if a trust will continue beyond your lifetime). If you are a business owner, a business attorney and valuation expert will probably be needed, as well as a business broker if the plan calls for the business to be sold at some point. Other advisors may also be included, depending on your specific circumstances and needs.
 
How an Advisory Team Works
The team will meet with you to help identify your goals and set priorities. At this stage, they should be asking more questions than providing answers. After this first meeting, they will typically meet without you to discuss how best to meet your goals, bringing their areas of expertise into the planning as they consider various legal and financial solutions. Then they will present their recommended plan to you and, with your acceptance, begin to implement the plan. From time to time, they will meet to monitor the progress and make any needed revisions as your needs and goals change.
 
Benefits for Business Owners
Many business owners are so busy running their businesses on a day-to-day basis that they don’t have the time, energy or vision to plan for the future. An advisory team can help the owner change focus from how much he is making today to the future rewards he can be building for his family and his retirement. The advisors can help the owner value the business, which allows them to project cash flow, plan for estate and gift taxes, know how much insurance to purchase, plan for compensation, identify how much collateral is available for financing and retirement planning, and monitor progress. Over time, the team can also help the owner prepare to sell the business to an outside buyer or transfer it to a family member by helping to grow the business, reduce debt, select the best corporate structure, develop management and groom a successor.
 
Continuity for Your Family
Involving your family members will acquaint them with the members of your advisory team, help them to understand what is being done and why, and avoid confusion and distrust later. This will give your family peace of mind, security and confidence during what can be difficult and uncertain times should you become disabled and after your death. Your advisory team can also provide continuity if your planning provides for minor children and/or grandchildren, those with special needs and even through generations to come.
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