Douglas Hilfiker often hears three things from people when it comes to estate planning: they’re too young, the process is too complicated and it’s too expensive to draft.
All three are common misconceptions, he said.
Not only is it important to look at estate planning options early, but the process is also not complicated; and while it can have upfront costs, it pays off eventually, he said.
“Overtime the upfront costs outweigh the consequences of not planning,” said Hilfiker, senior financial consultant with Manning & Napier.
Hilfiker spoke of the importance of estate planning during a recent Rochester Business Journal and The Daily Record virtual panel discussion on the topic entitled “Estate Planning Strategies to Secure Your Legacy.”
The virtual panel discussion was sponsored by Manning & Napier. It was moderated by Ryan Hohensee, associate advisory services consultant with Manning & Napier.
Veronica Van Nest, vice president and trust officer with Exeter Trust Company, joined Hilfiker on the panel.
The two spoke of the importance of documenting one’s legacy, accounting and planning for family dynamics and implementing leading strategies when undergoing estate planning.
“Many of our clients’ families are concerned with protecting the inheritance they intend to leave for future generations,” Van Nest said.
They discussed the five must-haves in an estate plan: a last will and testament, health care directions, trusts, beneficiary designations and power of attorney.
Hohensee spoke of the financial planning software Manning & Napier uses during estate planning sessions, noting it helps clients to visualize their plans and creates a roadmap from which to work.
Hilfiker said having beneficiary designations is key when it comes to estate planning, as is updating those designations as one’s life changes. Failure to do so is one of the biggest oversights he often sees, but noted it is easy to change in one’s estate plan.
He recommended individuals review their estate plans every three to five years or sooner if tax laws or personal circumstances change.
Van Nest talked about estate planning throughout one’s life, noting the different actions people should consider when they are under 50, between 50 and 70 and over 70-years-old.
For example, those under 50 may want to create a will identifying guardians of minor children, while those over 70 may see gifting as a priority and create trusts for kids or grandkids.
She also discussed the different types of trusts one can choose from, adding each allows individuals to set their own parameters.
Several assets can be used to fund a trust, including personal property, bank accounts and stocks, the panelists noted. Some assets used less commonly would be life insurance and real estate.
Hilfiker and Van Nest also discussed tax strategies to consider including annual exclusion gifts, lifetime gifts, paying college/medical expenses directly and funding trusts for a spouse, children and grandchildren.
Among the key takeaways of the session were:
- Prioritization: Check and confirm beneficiary designations are up-to-date and aligned with your wishes
- Review: If you have an estate plan, schedule a meeting with your attorney and other advisors to review your estate plan and identify any potential changes
- Creation: If you don’t have an estate plan, you should consider creating one, and
- Coordination: It takes expertise and a collective effort to create and execute an estate plan. Have all your resources and professionals aligned from day one to ensure no detail or process gets overlooked.
Manning & Napier will host a special breakfast event highlighting trusts and estate planning at 8:30 a.m. on Tuesday, May 2 at the Monroe Golf Club. Go to https://www.manning-napier.com/company/events to register.
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