Your investment portfolio and other property assets are simply your evolving estate
A previous financial article, “The Solution – ONLY follow financial strategies that are scientific, passive, diversified, savings focused, risk controlled, low cost, and tax efficient,†suggested that investors are much better off with a well-considered financial plan. A stable set of financial beliefs can help you to keep focused and on track throughout your life. This follow-up article discusses the additional need for you to have an estate plan in place.
Your investment portfolio and other property could become your estate at any time.
As you proceed through life and become more successful financially, you need to monitor the size and trajectory of your potential estate assets. In particular, if you have responsibilities to others, you need to prepare appropriately for the day when your valuable assets become your estate. Prepare for your demise in advance. For the sake of your family, find a good estate lawyer sooner rather than when it is too late.
Estate planning is highly complex and estate tax laws and other laws keep changing. Requirements for estate planning preparation depend on your wealth, family composition, financial dependents, age, health, tax exposures, charitable intentions, and many other special factors. Because you cannot predict when your assets will become your estate, you should have in place now an estate plan that is appropriate for at least the short-term and medium-term future.
A customer comment from the sidebar: "VeriPlan is a big help. I'm in my mid 50's and have been a diligent saver and passable investor for many years. I am going through a work transition from salaried corporate employee to independent consultant, and my aging parents are needing financial help. Financial planning is particularly important to me and my family now. Thanks for making your product available. I've recommended it to a number of folks and will continue to do so." J.H. in Portland, OR
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A customer comment from the sidebar: "VeriPlan has been a very flexible home financial planning tool. It took me a few hours on a weekend to understand what VeriPlan could do and to enter our financial data. Our family financial affairs were scattered all over, and we lacked a comprehensive picture of what the future might hold for us. I wanted a clear understanding of our projected lifetime and retirement income, expenses, taxes, debts, real estate, financial assets, college investments, retirement investments, and everything else all together." S. L. in Altadena, CA
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A customer comment from the sidebar: "You have done a great job of including the necessary instructions in VeriPlan, located close to where the modeling is happening. The thing I like about the VeriPlan User Guide is that it adds substantial additional commentary that I personally find very valuable. I was hunting for a capable and reasonably priced financial planning package, and VeriPlan is an awesome tool. The more I play around with it, the more valuable I find it. Your free user guide was what made me decide to get VeriPlan." C. A. in North Royalton, OH
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A customer comment from the sidebar: "One of the stories that VeriPlan tells me is how much of my money could be lost to excessive investment costs. I just switched to some lower cost funds in my 401k. I loved updating VeriPlan with the new cost values just to see the red bar on the Total Assets chart get significantly thinner - quite a shocking difference." M. W. in Tulsa, OK
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A customer comment from the sidebar: "I am extremely impressed with the depth of information that VeriPlan asks for and provides. VeriPlan seems much more detailed than one would expect for the very reasonable price. Although I am not a financial professional, I consider myself more financially educated than the most people of my age (62). I find that VeriPlan's depth to be just what we need for our retirement planning. I am glad I purchased it. Thanks." J. W. in Gainsville, FL
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A customer comment from the sidebar: "I have been very happy with this software. I will put VeriPlan to work to help optimize our IRA to Roth conversions, while avoiding the IRMAA penalties if we can. We are in an opportunistic window for the next several years. I have been appalled by the lack of professional knowledge available with respect to the tax burden that will fall upon us when RMDs take effect. Most of the information I have found suggests that it isn't a problem. Luckily, this software will be of great benefit to chart our course." J. S. in Louisville, KY
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A customer comment from the sidebar: "I am a recently retired engineer, and I created a cash flow Excel spreadsheet for 25 years of retirement. So, I fully appreciate the data and potential variances that must be accounted for. Yet, mine is so very simple compared to VeriPlan. I love VeriPlan's concept of total control over inputs and parameters. Veriplan's objectives are very much like mine, but it has many, many more input and control options, and the price is spot on." L. G. in Southbridge, VA
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A customer comment from the sidebar: "I've been using VeriPlan for a few weeks now, and it is everything I was looking for plus a whole lot more of what I didn't even know I needed. By simply switching VeriPlan to a state that does not have a state income tax, I can see how much I could save on traditional IRA distributions in retirement by moving to a state without income taxes. It is a real education in personal finance, and I think just about everyone would benefit from using this tool." T. H. in Silicon Valley CA
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While you usually do not need to do it very frequently, you should continue to review your existing estate plans periodically. Many people establish an estate plan and let a decade or more slip away without reevaluating the adequacy of their estate plans. Thinking about your demise is probably not high on your list of pleasurable activities. Therefore, you may wish instead to think of reviewing regularly your estate plans as a sign of your advanced wisdom. If you do not walk away from that hypothetical car crash, your family might. They will miss you both emotionally and financially. If your estate plans were not in order, then your family may miss you even more from a financial point-of-view.
While many individuals can competently and profitably self-manage their financial and investment planning destinies, few of them are prepared to make estate planning decisions without professional help. An experienced attorney specializing in estate planning is required for any modest or larger sized estate.
At a minimum, an estate planning attorney will draft proper documents that should remain standing and protect your intent long after you cannot. However, valid paperwork is not the sole objective, when you hire an estate attorney. You also should look for an attorney who is well versed in the tradeoffs between different estate planning approaches.
A customer comment from the sidebar: "VeriPlan's financial projection graphics simply lay out what the future might hold for my family. Also, VeriPlan is a very fast and automated financial investment calculator that allows me to change anything and to test alternate investment decisions rapidly. Its integrated documentation explains clearly how it works, and it also includes a wealth of well-researched personal finance and investment information that has been very helpful." T. F. in Muncie, IN
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A customer comment from the sidebar: "I do most of my own financial modeling, and I like the way VeriPlan generates “what if” scenarios that I like to compare, such as possibly buying a rental property, selling my house and renting, moving social security retirement age payment timing, and pulling out IRA money after taxes. Plus, I like VeriPlan for its automated projection of detailed investment costs. Thanks for making a great product." K. W. in Naperville, IL
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A customer comment from the sidebar: "I am 10 years out from retirement, and I needed to start thinking more seriously about having enough to retire on. I'm following the suggestions of you and others in opting for more hands-on retirement planning. I am also using lower cost index investing. There are too many wealth management companies out there, all ready to charge an arm and leg for what should be straightforward financial planning work." G. B. in Smith Mountain Lake, VA
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A customer comment from the sidebar: "Larry, Hello again! I've continued to work with VeriPlan, and the more I work with it the more I'm amazed at how much it does. It's an incredible decision support tool for my financial planning. Since I have already built a model of my lifetime finances, it is easy to test new ideas as they come to me. Thanks again." M. W. R. in Austin, TX
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A customer comment from the sidebar: "I first learned about the zero federal taxes on long term capital gains when under the 25% marginal income tax rate from working with VeriPlan a number of years ago. I’m no longer working but not yet receiving RMD’s or social security so my ordinary income is relatively low. So I’ve been taking full advantage of zero federal capital gains taxes by selling off my high expense ratio mutual funds which have a lot of capital gains built in since I’ve held them a long time and then I reinvest them in index mutual funds which don’t generate as much capital gains distributions. So the education that you and VeriPlan provide has saved me thousands in taxes, not to mention the expenses on high cost mutual funds. Thanks again." M. D. in El Paso, TX
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Particularly, if you can already use the term ‘million’ in describing your total gross assets before subtracting your debts, you need a competent estate planning attorney who can help you understand what you need to do now and how things might change for you in the future. Then, after taking sensible estate planning measures, get on with your life and let your heirs and/or your favorite charities figure out what to do with the largesse that you leave behind.
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