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Basics of Estate Planning-An Introduction

How to start your estate planning journey


1. Equity Markets – were mixed in this shortened trading week with U.S. stocks (S&P 500) down -0.05% while international stocks (EAFE) rose 0.59%

2. Fixed Income Markets – were also mixed this week with investment grade bonds (AGG) up 1.06% and high yield bonds (JNK) down -0.52%

3. Oil Spikes – in a surprise to global oil markets OPEC+ announced this week an oil production cut of more than 1 million barrels a day, sending oil prices up as high as 8%. The group has now contradicted previous assurances that supply would be held steady in a clear move towards locking in higher prices.

4. Fed Bankers Want More – comments this week from Fed Reserve Cleveland President Loretta Mester suggest members of the group believe the benchmark lending rate should rise past 5% and hold at restrictive levels for some time to combat inflation. These comments suggest hopes for a pivot on monetary policy may not be as imminent as previously thought.

5. Key Insight – Basics of Estate Planning-An Introduction: How to start your estate planning journey.

Basics of Estate Planning – An Introduction

As we lead into this Easter weekend, I can’t help but think about how grateful I am for what I have. My wife, my kids, my health, and my faith. All of it. To put an exclamation point on the reflections I’ve been having this week, I, unfortunately, lost a dear cousin too early in life to cancer. She was a mother of 3, in her early 40’s, and was taken too soon. She was a business owner, tough-as-nails Mom that was a bright light to everyone in her life. The comments I’m seeing on social media as her clients and family are hearing what has happened is proof of all of this. Everyone loved being around her. Her strength, discipline, athletic ability, and all-around abundance of life is leaving everyone around her absolutely taken aback by the news. It’s a “real as it gets” reminder that life is fragile.

It’s kind of crazy I was writing on the basics of estate planning this week after a successful Lunch & Learn on the topic this past week. I guess as the old saying goes “God has a sense of humor”. It seems fitting that this would be the week to address some things we all want to push off – the morbid conversations around what happens to us and our estate when we transition beyond this world. But, for me, it’s a reminder of my beautiful cousin and in general what Easter signifies.

What is Estate Planning?

Estate planning is a process by which an individual designs a strategy and executes a will, trust agreement, or other documents to provide for the administration of his or her assets upon his or her incapacity or death. Tax and liquidity planning are part of this.

Notice how Net Worth is not included in the definition of estate planning? This is a conversation for everyone. There are certain legal documents everyone should have in place, and below I’ll outline what these are. Additionally, there are certain concepts or documents that may make sense for some folks to consider, like trust, based on individual needs. For this written, I’d like to focus on what everyone needs as part of every estate plan.

There are four primary documents we’ll outline below. I’d highly recommend reaching out to your advisor or attorney if these are not in place. It’s one of the bigger gifts you can give your family:

  1. Last Will and Testament – A legal document that details how a person wants their property to be distributed after their death. You can also name a guardian for your minor children in a will and name the people responsible for managing and distributing your property. Without a will in place, state law determines who inherits your assets when you pass.

Quick personal experience here: My wife and I struggled the most
around who raises our children should we both pass together. This can
be a very uncomfortable conversation to have and memorialize in a
legal document, but it is so important. Quite honestly, one of the biggest
roadblocks we see for parents with small children is putting a will in
place. So, if this is you, you’re not alone.

  1. Healthcare Power of Attorney- A healthcare power of attorney (HCPA) is a legal document that allows an individual to empower another person to make decisions about their medical care. A healthcare power of attorney refers to both a legal document and a specific person with legal authority.
  1. Financial Power of Attorney - A financial power of attorney is a legal document that lets you appoint someone to manage your finances and property for you. These tasks could include paying bills, making bank deposits, collecting your insurance benefits, and more. The person you name in your POA to make these decisions is often called your agent or attorney-in-fact.

On the Financial POA think “everything the healthcare POA doesn’t
cover” as a general rule of thumb. They can be the same or different
individual or individuals as your healthcare POA.

  1. Healthcare Directives - An advance directive is a legal document that explains how you want medical decisions about you to be made if you cannot make the decisions yourself. An advance directive is used to guide your health care team and loved ones when they need to make these decisions or to decide who will make decisions for you when you can't. These medical decisions might include special actions or emergency care from your health care team. An advance directive can help you think ahead of time about what kind of care you want.

Once these documents are in place, we’d recommend reviewing and potentially updating beneficiaries on your accounts and assets to make sure they are in line with the overall estate plan strategy. This is a wonderful document for your advisor at TEN to have on file to review with you on an ongoing basis.

And finally, you’ve probably heard us say many times that financial planning is not a one-time thing. It’s ongoing and adapts as your life changes. We’d recommend reviewing your estate plan at regular intervals (say every 5 years), or when a major life event has occurred.

We here at TEN view one of our roles with our clients as a financial quarterback. So, if you have any questions around your estate strategy, an attorney to be referred to, or honest accountability we’re here. Just an email or phone call away.

To your health and living richly,

Dave and the team at TEN


Data points this week included:

• U.S. PMI – fell to 36.3 in March for the lowest reading since May of 2020. The reading marked the fifth consecutive month of decline and suggests rising interest rates and growing recession fears are starting to weight on businesses.

• U.S. Factory Orders – fell -0.7% in February for the second consecutive month of contraction. The decline was largely led by a 2.8% drop in transportation equipment.

• U.K. Manufacturing PMI – fell slightly to a reading of 47.9 in March, bringing the index to 8 consecutive months in contractionary territory. The one silver lining is that the new business component rose slightly, breaking 10 straight months of contraction.

• Germany Industrial Production – rose 2% in February, smashing market expectations for just a 0.1% improvement. Industrial production since December has now risen 5.8%.

• U.S. Jobless Claims – fell by 18,000 initial claims last week for a total of 228,000. Continuing claims on the other hand saw an uptick to 1.823 million claims.

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