In Perspectives

Do I need an estate plan? The answer is simple.
Are you an adult? Do you have stuff? Then you need an estate plan.
The real question is: “What is the right estate plan for me now?”

Estate plans can mean anything from a will or a trust to a beneficiary designation form. A good estate plan benefits you and those you love. It can save your heirs time and money, avoid taxes, protect children, and, most importantly, take care of you if you’re not able. Understanding this, let’s consider several important life events that merit looking at your estate plans:

  • AGE OF MAJORITY (Not to be confused with maturity)
    When your child turns 18, they are legal adults. In the eyes of the law, you as their parent can no longer make decisions for them, including health care decisions. You are not entitled to medical information either – even in an emergency. This is because the law—specifically, a statute enacted in 1996 called the Health Insurance Portability and Accountability Act (HIPAA)—prevents the disclosure of a patient’s health information without the patient’s consent.  This is why every 18-year-old should have a healthcare power of attorney, allowing the named person to make healthcare decisions on their behalf. This document will also contain HIPAA authorization to ensure you can communicate with your children’s medical professionals. Just as important, a financial power of attorney allows your adult child to designate a trusted individual to make financial decisions if they cannot. Also, consider how your child’s accounts are titled. Checking and savings accounts should have a “transfer on death” designation. If they own life insurance or have a retirement account, be sure to they have beneficiaries designated.
    The purchase of a home or other real estate is another reason for younger individuals to start their estate plans. Many believe a simple solution is to add a co-owner, allowing for a seamless transition of the property at their death. However, non-spousal co-ownership comes with many downsides: potential gift tax consequences; inclusion in any co-owner’s lawsuit settlements; the need to retain co-owner’s permission to sell or refinance property. A better solution, which avoids these issues entirely, is a will or trust which ensures the property passes at your death to your beneficiaries.
    At the very least, you should look at your estate plans before a big trip. Particularly, if you are traveling for long periods of time. Lengthy vacations may encumber your ability to address important financial matters such as filing your taxes, selling real estate, running a business, or transacting accounts. Be sure to have a financial power of attorney in place which would allow your trusted individual to see to such matters. Other important estate planning documents include a will with guardians appointed for minor children and up-to-date beneficiary designations.
    Undeniably, having a child prompts most parents to think about the guardianship and financial security of their child should they pass away. To avoid the probate court appointing a guardian for your child, you need a will which specifically nominates a guardian for your children. Without a will, the courts usually choose a family member. If you would prefer a close friend, for example, the court would have no way of knowing unless you designated that person in your will as your child’s guardian. Also, many parents purchase life insurance after the birth of a child. It’s important to consider who is named as beneficiary. Life insurance proceeds cannot be distributed outright to a minor child.  Alternatives to naming a minor child as beneficiary include: 1) naming an adult guardian as beneficiary; 2) naming a Uniform Transfers to Minors Act account; or 3) naming a trust established for the child.  Lastly, as mentioned earlier, every adult should have a financial power of attorney. This document can be a big benefit to your child by giving someone quick access to your bank accounts so they may continue paying your bills and providing for your child’s financial needs if you cannot. Without a durable power of attorney, a court order would be necessary and that takes valuable time.
    It’s important to consider how joining your life with someone else’s may impact how your estate will be managed. Married couples need their own wills and health and medical power of attorneys. Consideration should also be given to beneficiary designations and the titling of accounts. You may want to consider using a Bypass Trust which is a useful way to guarantee a portion of your assets flow directly to your beneficiaries in trust, protecting these assets for your children should your surviving spouse remarry. Speaking of remarrying, ensuring you have an estate plan which accommodates your blended families is imperative. The plan should address any gaps which might exist that could leave your assets in jeopardy. Not having a will, for example, could be problematic if you pass away. Without a will, your state’s intestacy laws would be applied – not your wishes. That means your assets may not go to your children or other heirs as would be your preference. Lastly, if either of you are bringing considerable assets into a second marriage or you want to minimize the potential for conflicts over asset distribution later, setting up one or more trusts could be a good idea.
    It is critical to update any estate plan that was made with a former spouse. If you have an existing estate plan, odds are you have appointed your former spouse as either your patient advocate, financial power of attorney, executor, trustee, or beneficiary. You should update all beneficiary designations and payable on death or TOD accounts. Revoke or amend your existing will, or create a will if you don’t already have one, paying particular attention to the named guardian of any minor children. After a divorce, if you don’t already have one, setting up a trust to handle alimony and child support and to direct funds to your heirs is also a wise decision. Another wise decision may be establishing a trust which names someone other than your former spouse as trustee to control your estate assets for the benefit of your children if you die.
    If you inherit assets, it is always a good time to evaluate your estate plans. A sudden influx of assets may change your opinions on how much and to whom you leave your assets. A substantial inheritance may require estate plans that minimize federal or state estate taxes. You may also reconsider giving your children a large sum of money outright and instead decide to leave their share in trust for their benefit. You may even wish to include or increase the amount you are giving to charity.
    With the birth of your first grandchild, you may decide to include them in your estate plans too. Perhaps you wish to provide for their future college expenses or help with the purchase of their first home. 529 plans are a great way to allocate funds to a grandchild for college which allows you to control the assets until withdrawn for college expenses. It’s imperative that you designate a successor which stipulates who will take over management of the account if you pass away. Another important consideration may be avoiding generation skipping tax which could be levied in addition to gift tax when making a larger gift to grandchildren. Much, if not most, of these taxes can be avoided by making the gift to a trust for the grandchild’s benefit.

So, when should you start planning your estate? No matter your stage of life, the answer is right now. It’s never too soon to think about your loved ones and what will happen to them when you are gone. Even if a major life event has not occurred, it’s wise to review your estate plans every three to five years because your assets and tax regulations are always changing.

If you have questions about your estate plans, please contact Legacy Trust. We have experienced advisors who can guide you through the estate planning process.

Legacy Trust and Your Right to Financial Privacy

At Legacy Trust we have established policies and practices that respect the financial privacy of all individuals who use our trust company. We believe it is critical to comply with the laws and regulations designed to secure your financial privacy. Your relationship with us as our client is very important to us, and we want you to understand our policies and practices about handling your information.

This Policy applies to you – This Policy applies to our relationships with individual clients who inquire about or obtain products or services from us for personal, family and household purposes.

Strict security measures – We take the security of information very seriously. We have established security standards and procedures to prevent access to client information. We maintain physical, electronic and procedural safeguards to guard client information.

Limited employee access – We have established procedures to limit employee access to information to only those employees with a business reason for accessing such information. We educate our employees about the importance of confidentiality and client privacy. We take appropriate disciplinary measures to enforce employee responsibilities regarding client information.

Why we collect information – We collect information about you to:

  • accurately identify you;
  • protect and administer your records, accounts and funds;
  • help us design or improve our products and services;
  • understand your financial needs;
  • save you time when you apply for new products and services; offer you quality products and services; and comply with certain laws and regulations;

We collect information – We collect and maintain your personal information so that we can provide investment management and other services to you. The types and categories of information that we collect and maintain about you include:

  • Information we receive from you to open an account or provide investment advice or other services to you (such as your home address, social security number, telephone, financial information and investment objectives).
  • Information that we generate to service your account or from our transactions with you (such as account statements and other financial information).
  • Information on your transactions with nonaffiliated third parties.

We have established procedures so that the financial information we collect is accurate, current and complete. We are committed to work with you to promptly correct any inaccurate information.

Our selective sharing of information – In order for us to provide investment management and other services to you, we do disclose your personal information in very limited instances, which include:

  • Disclosures to nonaffiliated companies as permitted by law, including those who help us service your account (such as providing account information to brokers and custodians).
  • Other limited disclosures as permitted by law, for example, required reports to government entities.

We do not share your information with third parties for marketing purposes. We do not sell your information.

Former clients – If you end your relationship with us, we will continue to adhere to the privacy policies and practices described in this notice.


Important Information About Procedures For Opening A New Account

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account.

What this means for you: When you open an account, we will ask for your name, address, date of birth and other information that will allow us to identify you. We may also ask to see your driver’s license or other identifying documents.

We apologize for any inconvenience this may cause; however, federal law prohibits us from waiving these requirements.

You are leaving the Legacy Trust website

Legacy Trust makes no representation concerning nor is it responsible for the quality, content, nature, or security of any hyperlinked site. This link is provided as a convenience and does not imply any investigation or endorsement of the site.


Do not send sensitive information over email. If you need to communicate sensitive information, please call us at 616.454.2852


The views expressed on Linkedin do not necessarily reflect the views of Legacy Trust