In addition to guiding his clients' investment strategy and planning for a comfortable retirement, John Savadjian also has a wealth of expertise in estate planning. One of the benefits of cultivating long-lasting relationships is John's ability to provide the kind of insightful financial advice that ensures a lasting legacy for his clients' families.
What Is Estate Planning?
Estate Planning is the means by which a person decides who will take on their responsibilities if they become incapacitated and who will receive their assets after they die. One of the central goals of estate planning is to make sure that beneficiaries do not pay more in taxes, legal fees, and court costs than is absolutely necessary. In other words, one of the goals of an estate planner like John Savadjian is to help clients minimize gift taxes, income taxes, estate taxes, and any other associated costs.
When you pass away, chances are that you want some control over how your assets are distributed to the people or organizations you care about. To ensure this happens, you need to leave explicit instructions declaring to whom your assets should go, what you want them to receive, and when they should receive it. Essentially, estate planning is making a plan in advance regarding how your estate should be carried out after you die. After you have an estate plan in place, it should still be updated over time as your situation and the applicable laws change. In other words, estate planning is an ongoing process, not a one-off event.
Estate Planning Is for Everyone
Although it may not feel like it, you do have an estate, nearly everyone does. Your estate comprises your assets such as your home, bank accounts, car, investments, and life insurance. All of these items, regardless of their size, are part of your estate. Estate planning, however, goes beyond merely dealing with your possessions. It includes all of the steps people take during their lifetime to plan and prepare for illness, incapacity, and death. Estate planning is important for everyone because it involves taking care of your loved ones by taking care of yourself. No matter how large or small, we all have estates and none of us gets to keep it after we die.
Key Elements of Estate Planning
A solid estate plan should include these five key elements: power of attorney, will, medical directive, trust(s), and beneficiary designation.
Power of Attorney
When you give someone a power of attorney, you designate them to manage your affairs in case you become incapacitated. The designee, known as your agent, now has the power to make financial decisions on your behalf. Assigning a power of attorney becomes even more important if you are single, since this duty would normally go to your spouse. If you do not designate a power of attorney, the court will choose someone to serve as your guardian.
One of the most important aspects of estate planning involves drawing up a will, which is a legally binding document that stipulates who should get your assets and your property upon your death. A will also involves naming an executor, the person whom you want to carry our your instructions. If you still have minor children, it also designates a guardian who will care for them if you become incapacitated or die. The basic purpose of a will is to give you a measure of control over your legacy.
Similar to a power of attorney, a medical directive designates whomever you choose to make healthcare decisions on your behalf when you are physically unable to do so.
The two principal documents in a medical directive are a living will and a healthcare proxy. The former includes your healthcare instructions, in the event you become terminally ill. The latter designates who will make medical decisions for you if you become incapacitated.
This document is important because families will often argue about how to care for a loved one. A medical directive can forestall this possibility and make sure your wishes are fulfilled.
A trust constitutes a legal agreement in which a trustee takes legal ownership of a person's (trustor) assets on behalf of a beneficiary or beneficiaries. The person setting up the trust, however, has the power to say how and when the beneficiaries receive the assets held in the trust.
The most important aspect to keep in mind when thinking about setting up a trust is that assets in a trust avoid probate. Any assets outside of a trust, however, are exposed to probate.
A beneficiary designation enables you to transfer assets directly to individuals after you die. These designations are usually assigned when a retirement account, financial account, or life insurance policy is opened. Because they actually supersede the contents of your will, it is crucial that you keep your beneficiary designations up to date.
Because of John Savadjian's knowledge and experience, he is able to incorporate each of these elements into an estate plan that accurately reflects his clients' plans for the ones they leave behind.
Putting together an estate plan, however, is just the initial step in the process. New circumstances or lifestyle changes may affect even the most careful planning. For this reason, John Savadjian reviews client estate plans on a regular basis to make sure everything remains consistent with their wishes.