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How to Diversify Your Wealth for Greater Financial Security: Asset Location Vs. Asset Allocation
November 11, 2021
Conversations to Have with Your Aging Parent:
How to Keep Assets in the Family
According to a recent Gallup poll, less than half of Americans (46%) have a will. Fortunately, this rate increases to 75% for Americans older than 65, underscoring the value of an estate plan as you age. Even though you know, it's important to plan for what happens to assets after death, and it's still a sensitive subject. This may be especially true when talking to your parents. But if you keep putting off the conversation for "another day," you may find yourself dealing with dreaded probate.
What may be a difficult conversation today could very much simplify your life in the future, and in many cases, getting started is the hardest part. Once you open the door to the conversation, you may be pleasantly surprised by how much you and your parents have to learn and share. These four questions can help you get the conversation going about keeping assets in the family—or at least where they want them to go.
1. What Happens to Your Assets If You Don't Have a Plan?
If you die without a will, a probate judge distributes all of the property and assets in your name according to your state's intestate succession laws. This can take months or years to resolve and cost thousands of dollars that otherwise could go to heirs. Planning in advance puts your parents in charge of what happens to the assets they've worked so hard to earn during their lifetime.
2. If You Have a Plan, When Was the Last Time You Reviewed It with a Professional?
Your needs change throughout your life. For example, if one of your siblings has divorced or died since your parents put together their will or trusts, they may want to revisit how they divided the assets among the heirs. Perhaps they sold a piece of property they originally planned to give to someone, and it is no longer available. This can also be a good time to examine insurance policies, retirement accounts, and pensions.
3. Who is the Trustee?
One of the most important decisions anyone can make when establishing an estate plan is choosing the trustee. This person or institution plays an essential role in managing the assets since they must manage the trust and make decisions in the beneficiaries' best interests. In some cases, a family member can step into the role successfully. However, in many cases, the job is better left in the hands of a professional who doesn't have emotional attachments to the people and possessions affected.
4. Where is Everything?
Talking to your parents about money can feel like an intrusion. However, you should know where to get information about their bank accounts, investment accounts, insurance policies, real estate, and retirement plans. Otherwise, you may find yourself on a scavenger hunt through their files as you search for details. Having the information now saves time later and reduces the risk that you'll miss something.
Planning for retirement is just one part of preparing for your future. You've worked hard to build your wealth. Now it's time to protect it. Contact us at Wealth Management Solutions and speak to our Scottsdale financial advisors that specialize in financial planning.
