The field of estate planning continues to evolve and adapt to the challenges that people are facing today. At one time estate planning was heavily geared towards managing estate tax liability, but a few tax law changes later, and now other issues are more important for families. Every client is unique, but there are a few common estate planning challenges we see on a regular basis.
Getting Started: The Biggest Challenge of Estate Planning
Getting people started on their estate plan remains the biggest challenge, and that is likely to never change. Wrestling with your own mortality, making hard decisions during the planning process, and working with a lawyer does not help the situation. But as people age, the pressure builds to create working solutions around their own situation, and when people experience the loss of a family member, or close friend, this often creates urgency around their own plan.
Our firm’s solution to this number one challenge is educate, educate, educate. That’s one reason we put resources into our newsletter (sign upper it on our homepage) and blog. We are always looking to find ways to make planning easier for our clients. We also invest time in helping them take ownership of their plans. Every family has varying needs, so the more we can listen to those needs and tailor targeted solutions, the more successful the plan will be.
7 Common Challenges for Effective Estate Planning
In addition to getting started with planning, there are a few other common challenges we see with regards to estate planning:
- Coordinating My Estate Planning With My Retirement Planning – How do we effectively integrate retirement investments (IRAs, 401(k)s, etc.) with estate planning?
- Planning for the Brady Bunch – How do we help the “his kids/her kids” hybrid couples who face unique planning challenges? One of the biggest challenges being the fact that the kids of the first spouse to pass away could lose their inheritance altogether. An effective plan will focus on what can be done to prevent that.
- Building Contingencies and Flexibility in the Plan – What if this happens and what if that happens? There are many possibilities to plan for, and our experience helps us guide clients through that. How do you build an effective estate plan that can adapt to an unknown future?
- Protecting Beneficiaries From Their Own Bad Habits – Some adult children have issues that threaten their parents’ estate planning – gambling, wild spending habits, addictions, etc. How do we help protect the “problem child” beneficiaries from their own weaknesses?
- Building a Plan to Work During Any Mental Incapacity – What happens if you (or a spouse) lose metal capacity through a stroke or dementia? An effective plan will address this.
- Maintaining the Effectiveness of a Plan as Laws and Needs Change – How do we build flexibility into an estate plan so it can be responsive to changes that may come up?
- Connecting Assets to the Estate Plan – How do we ensure that asset ownership and beneficiary designations are properly coordinated with the estate plan and will go smoothly?
These are just a few of the common challenges we work through with clients during the estate planning process. Unfortunately, these challenges can often intimidate people and prevent them from completing their plan. We help guide clients through the process to make it a bit easier, because addressing the issues above is part of building a successful plan. Estate planning is not a one-time event, but it is an ongoing process best built on a strong foundation with supporting advisors who can continue to guide and be a resource in the future.
We encourage our clients to partner with us and become informed of their estate planning needs, and to increasingly know the different alternatives for their individual situation. It is only then that a truly effective plan can be put in place, for there are no “rubber-stamp” solutions, or one-size fits all solutions that can be downloaded from a website. One of the biggest goals of our firm is to listen to the concerns of the clients, understand their specific needs, and then customize an estate plan to effectively address those needs.
We look forward to a chance to assist you with evaluating your alternatives. Please call us at 913-345-2323 to schedule a consultation.