What You Need to Know Now About Planning for the Future

While many of us understand what it is to inherit, some may not understand the legal and tax structures necessary to assure investments pass to heirs as intended.  The transfer of assets to heirs is an important part of estate planning.  One must understand the difference between a will and a trust document, the scope of a power of attorney, and why to list beneficiaries on an account.

Financial advisors are held to a fiduciary standard of care for their clients; that is, they must put clients’ interests ahead of their own. During conversations with clients, financial advisors may suggest putting protections in place so clients’ accounts go to the people they want to inherit them.

In planning ahead, you should know that a trust can direct actions in life and after death, while a will takes effect only upon death.  Wills do not protect against probate proceedings, which can be a long and costly process.  A trust is private and protects against the need for probate.  Additionally, a trust document can authorize and empower others to represent your interests while you are still alive.

Anyone concerned about losing their mental capacity to make decisions while still alive should consider creating a power of attorney.  This document can authorize family members, trusted friends, or a professional to make decisions when a person is no longer be able to do so for themselves. The power can be limited in scope, or “spring” into effect upon a triggering event. Without a trust or power of attorney, adult children may have to go to court in order to assist parents when needed.

Another way to designate your heirs is to assign beneficiaries on accounts to receive assets upon death.  These designations can legally override beneficiary instructions in estate documents. That’s why it is important to verify that account level instructions match your will and/or trust documents.

To avoid eventual chaos, it may be necessary to discuss with adult children the subject of future incapacity, or the loss of the ability to drive or take care of ourselves. Of course, most of us would prefer to live independently. If this is the case for you, your financial advisor can call attention to potential problems as well as guide discussions with adult children to help you live independently as long as possible.

If you are looking for a fee-based advisor that is independent, and if you have at least $100,000 to invest, let’s explore working together.  Stratos Wealth Partners are a group of professionals who provide financial guidance and impartial strategies to help in wealth accumulation and management.

Contact Stratos Wealth Partners at 928.460.5507, visit www.prescottwealthmanagment.com, or stop by the office to schedule an appointment at 100 E. Sheldon Street, Suite 105, in Prescott.

The opinions in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.  Securities offered through LPL Financial, member FINRA/SIPC. Investment advice offered through Stratos Wealth Partners, Ltd., a registered investment advisor and a separate entity from LPL Financial.  Stratos Wealth Partners and LPL Financial do not provide legal advisor or tax services. Please consult your legal advisor or tax advisor regarding your specific situation.