Five Key Decisions When Putting Together Your Estate Plan

By Frederick "Rick" Fisher
Originally published in The Union on April 24, 2016. Download the PDF.

Over the last 26 years, I have settled three estates — and in my 18 years of financial planning, I have seen the effects of good planning and of poor planning. 

Having an effective estate plan is crucial, however having a poorly thought out plan can be as harmful as having no plan at all. 

Our firm routinely advises our clients who have yet to address their estate planning to do so. We provide referrals to competent estate planning attorneys. However, having a good estate planning attorney who will guide you through the process and prepare the appropriate documents, is not necessarily going to give you a proper estate plan. A crucial ingredient to the process has little to do with the attorney or the documents. It has to do with the choices the trustors make regarding who will administer the estate upon the death of the trustors, and how the estate will be distributed. 

To illustrate we will take the case of the fictitious couple Richard and Monica Jones. 

Richard and Monica are in their early 40s with three children under 18, with the youngest being 8. Richard is a banker and Monica is a part-time teacher. 

A few years ago, Richard’s parents asked him if he would be the successor trustee for their trust. They chose him because he was a banker and understood financial concepts. They also felt that he had the proper temperament to take on this huge responsibility. Richard could separate the financial aspect of an estate from the personal considerations of an estate. Richard had seen firsthand in his role as banker, how having a person who struggles with the emotional part of administering an estate can create problems. 

He remembered how a successor trustee refused to sell assets in order to pay estate bills and taxes, because they could not detach the deceased from the business part of estate administration. This led to fines, additional costs and fire sales that ultimately led to angry beneficiaries and lawsuits. Having successor trustees that can handle the job, from a business and emotional standpoint is crucial. Having accepted the role as successor trustee, I reminded Richard that he and Monica, had yet to complete their financial plan. 

They had started, but got stuck on who would be the custodian for their three children; a key decision when creating an estate plan. Another concern for the Jones’ was how to fairly divide their property to their kids. Deciding to split the financial assets three ways was the easy part. The hard part was how to divide the personal items, the artwork, the collectibles, and the family photos. 

This was going to take time and more discussion. To complicate matters, the Jones are wealthy and they want to make sure that their children don’t receive a financial windfall till they are ready. So, the decision is who will monitor the investments, and when should the children have access to the money. Fortunately, once the decisions are made, they are not set in stone. Estate plans can be amended as needed. Once the kids are grown, there is no need for guardians. In addition, they may be able to help trustors fairly divide up those personal items that are hard to assign. 

In the end, Richard and Monica sat down and made the decisions necessary to get the plan in place, and took our advice to review every five years and make changes as needed. 

If you have been putting off estate planning due to these issues, now is the time to set up a partnership with an Estate Planning Attorney and a Certified Financial Planner. 

Frederick Fisher is a Certified Financial Planning Practitioner, and Insurance Agent. Securities and Advisory Services offered through National Planning Corporation (NPC), member FINRA/SIPC, a Registered Investment Advisor. Ostrofe Financial and NPC are separate and unrelated companies. For questions or suggestions, contact Rick Fisher at (530) 273- 4425, or, or visit Branch address: 565 Brunswick Road, Ste. 15, Grass Valley