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How important are my legal documents?

VERY IMPORTANT … especially if you live in Louisiana. It is extremely important to ensure one’s legal documents and investments are in good order and do not contradict one another. The smallest misstep on the estate and legal side of a portfolio can cause huge headaches for the investor AND their heirs. The most common legal documents, which are considered a MUST, are a will, a durable power of attorney for health and wealth, and often, a living will is a good idea, but not always. 

Trust or Will?

Let’s start with ... I am NOT an attorney, and I have never played one on TV. I also did not stay at a Holiday Inn Express last evening! If you are reading this in 2014 or later ... that was probably funny!!  Though a living will can help outline important healthcare decisions in advance, a living trust may make sense in some situations. Living trusts help pass on property and assets to your beneficiaries, and unlike living wills, most living trusts are not subject to the probate court. As always, we encourage caution when purchasing a trust. Again, we are not attorneys, and cannot and do not give legal advice, but we have seen clients spend thousands of dollars on trusts in hopes of avoiding probate costs, only to find that the trust cost MORE than what was saved on probate. Yes, it is possible for someone's legacy to erode over time while involved with the probate process, but it is rare and will depend on the attorney you choose to handle this part of your estate. We maintain professional relationships with local attorneys who have the same standard of professionalism and excellence our financial planning firm offers on the financial planning side. Do not be deceived … scare tactics often mean you are dealing with a person who is primarily “selling” trusts … not necessarily a professional with the client’s best interest at heart. Avoid these pseudo advisors at all costs … and the costs can be high! Allow us to make a professional recommendation to local attorneys who have proven to us that they have our client’s best interests at heart! And above all ... remember this: WHAT YOUR LIVING TRUST AND WILL DOES NOT COVER COULD END UP COSTING YOU AND YOUR HEIRS A FORTUNE. That is another story and one that our 3-Step Review will catch every time! 

Minimizing probate and excess estate taxation

By establishing and regularly updating proper legal documents, one can probably avoid probate all together, but remember … avoiding probate might not qualify as a primary concern. Trust “salesmen” and pseudo advisors can sometimes cause greater harm than probate by overlooking other more pressing concerns while concentrating only on one aspect of a financial plan. Is avoiding probate important? The answer is … maybe! Investment advisors who have a higher level of fiduciary responsibility and who are skilled in both the preservation and distribution phases of life might help one save far more than would have been lost to probate costs! Excess estate taxation can sometimes be avoided by simply titling your accounts correctly or changing the way you invest. When developing a written investment plan, your estate plan (Distribution Phase) should be considered as equally important to the accumulation and the preservation phases of life. The 3-STEP REVIEW may make the difference between keeping one’s money in the family, generation to generation, or losing it to income taxation! Leave a Legacy to children, grand children, church, and charity. Do NOT lose it through the “back door” to income taxes from a lack of planning by focusing on only one aspect of a financial plan. 


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