In Perspectives

In 2003, Jon and Stefanie Booker were living the life of their dreams. In their mid-30s, Jon worked as a production manager for a manufacturing firm, while Stefanie repped for a major pharmaceutical company. The couple had three children, ages 10, 7, and 4. In 1998, they purchased the family home where they enjoyed long weekends playing with their kids and the dog, Baxter. The Booker’s didn’t have a lot of extra money for luxuries, but they were able to contribute the maximum to their 401ks each year.

It was about that time when the Booker’s realized they needed an estate plan to protect their family and their assets. First and foremost, they needed to identify suitable guardians for their children in the event of tragedy. Second, they wanted to appoint a reliable trustee to manage the children’s inheritance and distribute it to them when they turned 25 years old. To their credit, they did what many other young couples avoid doing – they met with an estate planning attorney and drew up a trust, will, and power of attorney. They could now breathe a collective sigh of relief knowing they had an estate plan to protect their children and their wealth no matter what might happen to them.

Fast forward 20 years, Jon is now an executive vice president at a large manufacturing company, Stefanie is a regional business manager for the same pharmaceutical company. Their kids are now 30, 27 and 24 years old. The couple bought a summer home on a lake in Newaygo County 10 years ago, and now spend many summer days with their family and friends on their pontoon boat. Over the years, Jon and Stefanie were able to keep up with everyday expenses while tucking away money in a retirement fund.  Their investments grew steadily and were augmented in 2016 as the result of an inheritance they received from Stefanie’s parents.  It had been a time of great change for the family. However, the one thing that hadn’t changed since 2003 was their estate plans.

“When we had our estate plan drawn up in 2003, it was such a relief,” said Stefanie. “No 30-something wants to think about or prepare for when they die, but Jon and I knew we needed some type of plan to protect our children. So, we faced reality head-on and got it done.  But the truth is, we really haven’t thought about it since.”

Jon and Stefanie’s situation is fairly common according to Kelly DeRidder, Senior Vice President and Certified Trust and Financial Advisor at Legacy Trust in Grand Rapids.

“Most people think once they’ve done their estate plans, they can put the binder in a safe place and move on,” said DeRidder. “But what most people overlook is that estate plans represent a snapshot in time. They reflect your life situation at the time the plan was drawn up.  Those plans require updating over the years.”

The failure to update your plans may have unintended consequences, which can result in delays, misunderstandings, and additional administrative costs. DeRidder highlighted five important reasons to update your estate plan.

  1. You have moved to a new state, meaning you will have new state and estate tax considerations at death, as well as different laws governing estate settlement and trust administration.
  2. You have acquired or inherited more and various types of assets such as real estate, retirement accounts, business interests, intangible and tangible assets, receivables, and life insurance. Your estate may have grown to a size which would make it subject to federal estate tax.
  3. The age and status of your beneficiaries has changed. Your minor children are now adults and do not require a guardian or age-based asset distribution strategies. You may have grandchildren you would like to include in your estate plans.
  4. You have developed strong charitable interests and would like to include the charities in your estate plans.
  5. The trustee and/or personal representative you chose in your original estate plans is no longer a good fit or available. Friends and family may be convenient but may not be the best option. Like you, they go through changes – growing older, moving away, or dying. For these reasons, many people choose a corporate trustee/personal representative instead.

“These are just a few of the most common reasons,” said DeRidder.  “In general terms, you should review your estate plans every three to five years to ascertain if an update is necessary.”

DeRidder says if you find an update is warranted or are unsure, the best approach is to contact your Trust Advisor, like those at Legacy Trust, who can assess your plans in light of your current situation. If updates are required, the next step is to contact your estate planning attorney to amend your documents. The key is to begin the assessment process.

For Jon and Stefanie, life’s journey has been a happy albeit hectic path these past two decades.  They’ve recently had a first meeting with Kelly DeRidder and are taking the early steps to update their estate plan.

“We’re in our mid-to-late 50s now and we’re starting to think about retiring early,” said Jon.  “Stefanie and I know we still need to work a few more years, but we feel we should get our estate updated so that we, our children, and grandchildren are protected. No parent wants to leave their children in a lurch when they die, so we’re now mapping out a plan for the next phase in our life. It will bring us peace of mind to know our family is well-positioned for the future.”

If you would like more information about whether it’s time to update your estate plan, you can contact Kelly DeRidder or any of the wealth management advisors at Legacy Trust at www.legacygr.com.

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).
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  • 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).
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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.

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