Special Edition
Annex Wealth Management’s Dave Spano and Brian Jacobsen look back at 2023.
Most-Watched Week In Review
US Debt was downgraded and earnings reports were mixed. Some simple math seems to show there is now an alternative to stocks. Annex Wealth Management’s Dave Spano and Derek Felske discuss. (Published August 5, 2023)
Most-Watched Ask Annex
Is 60/40 Back? | Active vs Passive | Risk vs Reward | AI
Each week, members of the Annex team work together to answer your questions. This week, Annex’s Sarah Kyle and Matt Morzy answer your questions. (Published June 19, 2023)
Most-Watched Video
What’s The Difference Between Federal Debt And Deficit?
What’s the Federal Budget Deficit, the Federal Debt, and what’s the difference? Annex Wealth Management’s Jason Cooper explains. (Published May 15, 2023)
Most-Read MoneyDo
Estate Planning is often thought of as something we all need eventually, but many of us put it off. Unfortunately, there are too many instances where people never get around to putting a plan together, leaving a mess for loved ones to navigate.
Your MoneyDo this week is to put estate planning at or near the top of your priority list if any one of the following situations has crossed your mind.
1. You Want to Avoid Court-Supervised Decision Making
Establish financial powers of attorney and health care powers of attorney, where you name someone to act on your behalf while you are alive, but no longer have capacity to manage your finances. Evaluate options for establishing a Trust or using other non-probate methods to transfer your assets upon your death.
2. You are Worried About Who Will Be in Control
Through various estate planning documents, you have the power to name the individual(s) responsible for managing your affairs as you age and settling your final affairs after death. Naming someone avoids family arguments about who is in control, and ensures you’re selecting the appropriate individuals that will follow your wishes
3. They Couldn’t Read Your Mind When You Were Alive
Without legal documents that detail your planning, your loved ones may try to guess at what or who you thought was important to you. Even then, state statutes provide defaults for who will receive your assets at your death. If you desire to leave assets to specific individuals or charities that are not your ‘heirs at law’ you need to have an estate plan that outlines your wishes.
4. Who Will Care For Your Kids?
If you have minor children, your estate plan is where you name guardians to care for those children both physically and financially. You can also create trusts for their financial benefit that will last longer than their 18th birthday.
5. Consider (And Protect) Your Beneficiaries’ Current Circumstances
Sometimes, your loved ones have unique circumstances that require some forethought and planning as you write your estate plan. A trust is a thoughtful option if you have any beneficiaries receiving governmental benefits, since an inheritance could disqualify them from those benefits going forward.
Other beneficiaries may require added protection around the inheritance you leave them. Establishing trusts for their benefit can provide protection for those assets, so they cannot be used to satisfy creditors of the beneficiary, subject to division upon divorce, or provide further protection if the beneficiary has addiction concerns or is not financially savvy.
But none of that will happen by default, so you need to put a legally enforceable plan in writing to ensure all of these things are properly addressed.
6. Relieve Future Tensions Between Family Members
Unfortunately, inheriting money or even the expectation of inheriting money can create new tension and dynamics between family members that never existed before. Or worse yet, the tension from inheriting money can permanently sever family relationships.
If you’ve made gifts to some family members, you’ll want to document and account for those within the estate plan, even if it is to say you want an equal distribution despite those gifts.
Alternatively, if you want to disinherit certain individuals or treat beneficiaries equitably rather than equally, planning makes the process clearer. But even then, communicating your plans to all those family members is critical.
7. A Small Estate Needs Planning, Too
Regardless of your wealth, everyone needs to have powers of attorney in place, as well as a Last Will and Testament and good beneficiary designations.
If you find yourself in a situation where you may not have sufficient assets to cover long-term care costs, you may need estate planning that incorporates elements of Medicaid planning to ensure you are able to qualify for any governmental benefits.
8. Reduce Taxes
While you may not find yourself with more than $12.06 million to worry about a federal estate tax applying at your death, there are often income tax consequences to beneficiaries. In addition, some states still have their own estate or inheritance tax that is lower than the federal exemption. As part of your estate plan, it is important to do income tax planning (and financial planning) to avoid unexpected levels of income tax on your beneficiaries.
9. You Poured More Than Money into Your Business
If you own your own business, it’s critical to consider estate planning that incorporates a business succession plan. Succession plans help to transition ownership and management to the next generation while realizing the value of your life’s work.
10. Preserve the Family Retreat
Families who own vacation property or hunting land that want to ensure it continues as a family legacy need to develop an estate plan which transitions ownership to the next generation smoothly. It’s important to discuss your plans with the next generation to make sure they want and value the property as you do. Not all family members may want partial ownership so planning to avoid family disputes or a forced sale of the property is important.
11. Your Life Changes. Your Estate Plan Should Too.
As life happens, so do the number of events that may trigger the need to update your estate plan or to create a plan. Changes in family status (divorce or remarriage), death of any individuals named in your estate plan, and changes to your state of residence are all moments that require recalibration.
Estate planning is not only about making sure you are taken care of, but it also helps make it easier for your loved ones to take care of you. So, if you have been putting off doing (or updating) your estate plan, and any of these have resonated with you, Annex is here to help. While Annex does not draft legal estate planning documents, we can assist you in getting started. We work with many law firms to help get our clients’ estate planning goals in place. Head to annexwealth.com and click on the ‘Get Started’ button to find out more.
