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Consumer Article April 2019 Wondering If You Need a Will? If You Have to Ask, the Answer is Probably ‘Yes’

Wondering If You Need a Will? If You Have to Ask, the Answer is Probably ‘Yes’

 

Who needs a will? “Well, any adult who might die [does],” says FPA member and CERTIFIED FINANCIAL PLANNER™ (CFP®) professional Leon C. LaBrecque of Sequoia Financial Group in Troy, Mich. “I know that sounds tongue-in-cheek, but…the stark facts are, almost everyone needs a will.”

 

A will is a legal document (or set of documents) that details a person’s (or a couple’s) intentions regarding the handling of their dependents (such as children, if they have any), their assets, and other loose ends, upon their death. Without a legally sound will to explicitly state these intentions, vitally important decisions about the disposition of assets, guardianship of dependents/children and the like typically default to a state probate court, where they end up in the hands of a judge who, for better or for worse, must interpret the deceased person’s intentions.

 

“If you don’t have a will, your [home] state basically will have one for you,” explains FPA member Luis F. Rosa, CFP® of Build a Better Financial Future in Las Vegas, Nev. “That judge could make decisions that don’t necessarily align with your wishes.”

 

For many, that’s a less-than-optimal outcome that easily could have been avoided had they invested the relatively modest amount of effort and money required to get a will. However, despite the prospect of losing control over the fate of their children or their hard-earned money when they die, a will is something a vast majority of American adults need but only a minority actually have. According to a 2017 survey by Caring.com, roughly four in 10 American adults have a will or living trust. The likelihood a person has a will increases with their age, as just 22 percent of Millennials have one, compared to 36 percent of Generation Xers, 58 percent of Baby Boomers and 81 percent of people age 72 and over.

 

Why don’t adults who need a will not have one? An unwillingness to contemplate one’s own mortality is one deterrent, according to Rosa. What’s more, getting a will just isn’t a priority for younger people, who tend to view their death as too remote a possibility to plan for now. And as Rosa points out, “Often people think that they need to be wealthy to have a will. The truth is that wills do not only cover monetary things.”

 

The more you know about what getting a will entails, the less daunting the process becomes. Here’s a quick FAQ to shed light on this necessary but oft-avoided aspect of financial planning.

 

Who needs a will? If you own anything of value, either tangible or otherwise, and you want specific people or organizations to receive specific assets of yours when you die, you need a will. If you have dependents, such as a child, and you want to ensure they go to the guardian(s) of your choice should you die, you need a will. If you want to spare family members and loved ones the legal hassles and uncertainty that can plague the probate process when a person dies without a will, you need a will.

 

“Everyone with any amount of property needs a will, to lay out clear instructions as to the three main questions: One, who gets what? Two, how and when do they get it? And three, who’s in charge?” explains FPA member and estate planning attorney Michael D. Whitty, CFP® of Freeborn & Peters, a law practice in Chicago, Ill.

What should a will include? A will should include a complete inventory of all the assets you own — a home, a car, money in bank, investment and retirement accounts, even items such as jewelry, an antique collection, really anything of substantial value — along with specifics about the value of those assets and how (to whom) each of those assets should be distributed following your death. “Having a will avoids intestate succession, where your property is distributed via state law,” says LaBrecque. “This is expensive and time-consuming. Avoiding intestacy is one of the main reasons to have a will.”

 

A will also should identify an executor — the person who will be responsible for ensuring the provisions of your will are carried out as specified. If you have children or dependents (such as a disabled sibling who lives with you), the will should also specify who will assume guardianship of those people when you die.

 

Where to get a will? You want your will to be a thorough and legally sound document. While a variety of online sources offer either one-size-fits-all or do-it-yourself will preparation services, personal finance experts strongly recommend enlisting an attorney who specializes in wills and estate planning, to ensure the will covers everything that needs covering, that it addresses your unique circumstances and wishes, and that it is prepared according to the specific laws and requirement of your state. “You don’t want to risk leaving something out, or not doing something right,” says Rosa.

 

What will it cost to get a will? “A will might cost you just a few hundred bucks,” Rosa says. “That’s a small price to pay for the peace of mind it gives you.” Getting a will from an attorney can indeed cost as little as several hundred dollars. The cost tends to rise in step with the complexity of a person’s holdings and wishes.

 

Will I ever need to update my will? Most likely, yes. “Really any major life event could require you to update your will – change in marital status, birth of a child, buying a home, those kinds of things,” he explains.

 

Where to keep your will document(s)? Treat your will as you would other important documents. Keep multiple copies in both digital format and hard copy, onsite at your home and offsite, in a place like a safe deposit box, with your attorney and/or financial adviser, with a loved one, etc. Keep a digital copy in the “cloud,” where you can readily retrieve it.

 

April 2019 — This column is provided by the Financial Planning Association® (FPA®) and FPA of San Diego, the principal membership organization for Certified Financial PlannerTM professionals. FPA seeks to elevate a profession that transforms lives through the power of financial planning. Through a collaborative effort to provide more than 23,000 members with tools and resources for professional education, business support, advocacy and community, FPA is the indispensable resource in the advancement of today’s CFP® professional. Please credit FPA of San Diego if you use this column in whole or in part.

The Financial Planning Association is the owner of trademark, service mark and collective membership mark rights in: FPA, FPA/Logo and FINANCIAL PLANNING ASSOCIATION.  The marks may not be used without written permission from the Financial Planning Association.

 

Media article Hire Expectations: How to Get the Most Out of a Get-to-Know-You Meeting with a Financial Adviser

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Hire Expectations: How to Get the Most Out of a Get-to-Know-You Meeting with a Financial Adviser

So you’re shopping for a financial adviser? When it comes time to sit down with a financial professional for an initial meeting, first impressions can go a long way toward determining whether that meeting ultimately will lead to a more lasting adviser-client relationship.

The person sitting across the table from you could be not only your chief financial guide, but also a valuable and trusted sounding board, strategist, troubleshooter, confidant, coach, problem-solver and voice of reason. In filling these important roles, a financial professional can have a profound impact on a person’s life, now and for decades to come. That first meeting can tell you much about the individual and the firm you’re considering hiring, and whether they’re a good match for you, in whatever role(s) you envision them playing on your behalf.

For all that’s at stake, from saving toward near- and long-term goals to managing investments to ensuring your assets are adequately protected with insurance, hiring a financial professional is not a decision to take lightly, says FPA member Dennis Nolte, a CERTIFIED FINANCIAL PLANNER™ (CFP®) professional in Oviedo, FL. “You need to be an educated consumer. This is the person you could be trusting with your hard-earned money.”

To get the most out of that meeting, and a good read on the financial professional and firm you’re considering, be sure to come prepared. What exactly does that entail? Here’s a rundown of the information to consider bringing and the approaches to consider taking during a first meeting with a financial professional, along with a glimpse of what to expect during that meeting, so you can make constructive use of these all-important get-to-know-you moments.

Meet in person. To gauge the caliber of the individual and their firm, the quality of service they provide, and your own comfort level with that person, meet with them face-to-face, at their office.

Bring any financial information you are comfortable sharing and you think would be relevant. Ask the planner for a master list of items you should bring with you as this will help expedite the process. That could include an inventory of your assets (home, investments, retirement accounts, insurance policies, etc.), plus tax returns and other information the financial professional may request in advance. Keep in mind, though, you are under no obligation to provide them with information you are not comfortable sharing at this stage. That can wait until the relationship is formalized.

Be ready to discuss more than finances. “We send our prospective clients what I call a ‘financial Rorschach test,’ which has a multitude of questions that not only ask about numbers but hopes, dreams, experiences, etc. I tell them to complete everything they think I should know, or that which they are comfortable telling me,” explains Nolte.

Bring your own ideas. “This may be ideas of where you are challenged, or ideas of what you hope for in your future,” explains FPA member DeDe Jones, CFP® with Innovative Financial in Lakewood, CO. “Thorough planning is best done with layers of information. These include the basic nuts and bolts of financial data, a layer of knowledge of investing, taxes, financial strategies, etc. But in the end, the plan becomes most valuable when the client brings their personality to the process: their hopes and dreams, if you will.” 

Come armed with questions of your own. The adviser should be prepared to answer questions about themselves (background, experience, expertise), their firm/practice (including areas of specialization), their investment/asset management philosophies, how they prefer to work and communicate with clients, and more. Don’t be shy about asking questions, and if you don’t get straightforward, transparent answers, that could be a red flag.

Look for the right fit on a variety of levels. Do you feel comfortable with them personally and seem to get along? “Good chemistry is important,” says Nolte. On a professional level, do their expertise, experience and area(s) of specialization jibe with your needs and priorities? Are they clear about what you can expect from them in terms of service and deliverables, and what they would expect from you as a client? Is the financial professional comfortable in whatever role you envision for them, whether that’s more hands-on or hands-off, whether that entails working as part of a team of advisers, etc.? What technology tools do they offer to clients to access, view and manage accounts?

Ascertain where their interests lie. A fiduciary is required by law to always put client interests above their own interests and those of their firm. Be sure to ask the adviser if they are a fiduciary, or if they hold themselves to a fiduciary standard.

Does he/she ask a lot of questions and come across as a good listener? During a fact-finding, get-to-know-one-another session such as this, it’s the adviser’s responsibility to learn as much as possible about you and your needs. “We believe that the first meeting should be strictly to answer questions, explain process, understand expectations and gain an understanding of what the client is seeking help with,” says FPA member Michael F. Kay, CFP® with Financial Life Focus in Livingston, NJ. “I believe beginning with financial data puts the client in an untenable position of having to share personal info before they have the opportunity to make a decision about working with the planner. No client likes to feel like they are being ‘sized-up’ based on the amount of their portfolio.”

Get clear about how the adviser is compensated. Do they work on commission, on a fee structure or a combination of the two? How are those fees/commissions calculated? How much comes out of your pocket, and what value do you get for your money?

Beware a focus on products over problem-solving. You want an adviser who’s focused on addressing the financial issues that matter most to you, not on selling a product that matters more to them.

Be sure they speak your language. “Look for someone who helps you understand your finances rather than speaking in jargon,” advises FPA member Aaron Clarke, CFP® in Ashburn, VA.

Prepare for engagement. “Once you engage with a financial planner, be prepared to provide a large amount of financial information,” says Clarke. “This is a sign they are taking your full financial life into account when creating your plan.” 

March 2019 — This column is provided by the Financial Planning Association® (FPA®) and FPA of San Diego, the principal membership organization for Certified Financial PlannerTM professionals. FPA seeks to elevate a profession that transforms lives through the power of financial planning. Through a collaborative effort to provide more than 23,000 members with tools and resources for professional education, business support, advocacy and community, FPA is the indispensable resource in the advancement of today’s CFP® professional. Please credit FPA of San Diego if you use this column in whole or in part.

The Financial Planning Association is the owner of trademark, service mark and collective membership mark rights in: FPA, FPA/Logo and FINANCIAL PLANNING ASSOCIATION.  The marks may not be used without written permission from the Financial Planning Association.