ABCs of Behavioral Biases (A to F)
Four self-inflicted biases that knock a number of investors off-course are anchoring, blind spot, confirmation and familiarity bias.
Estate planning is a critical aspect of the financial planning process. Reviewing estate planning documents is an important exercise, but it can be a daunting task that many consider tedious and even confusing at times. To help you in this review process, we created the following checklist that covers key considerations for the most common estate planning documents.
Some of the topics we will cover include:
Have you recently changed residency?
If so, ensure that you have established your domicile (i.e., legal home), and that your estate plan is valid under the laws of your domicile.
Do you need to review the applicable laws and any changes that have occurred since you executed your documents (state or federal)?
If so, review how your plan may have been affected, and update it accordingly.
Do you need to confirm and share the location of your original documents?
If so, ensure that your documents are kept in a safe but accessible place, known to your family and/or fiduciaries.
Do you need to confirm the terms of your General POA?
If so, review whether the powers are effective immediately or are “springing” (contingent upon the occurrence of a factor, such as incapacity), and whether they are durable (continue beyond your incapacity).
Do you need to review your appointed agents?
If so, consider the following:
Do you want to limit your agents’ powers?
Is there a need or good reason to record your General POA?
Have you revoked any prior General POAs?
If so, consider appropriate steps to prevent unauthorized action by your prior agents. In some cases, recording may be advisable or necessary.
Do you need to review your appointed agents?
If so, consider the following:
Are you planning to undergo a health procedure?
If so, consider executing the relevant medical institution’s Health Care POA form, in addition to what you might have in place.
Do you need to review your Health Care POA to confirm HIPAA authorizations?
Do you need to confirm that you clearly expressed your wishes regarding your end-of-life treatment options?
If so, review your Living Will Declaration and your instructions regarding the provision of artificial nutrition, hydration, palliative care, and life-prolonging medical procedures in the event of a terminal condition, vegetative state, etc.
Do you need to review your Executor/Personal Representative appointments and successors?
If so, consider the following:
Do you have minor children?
If so, consider the following:
If you hold any testamentary powers of appointment, have you properly exercised them under your Will?
Do you need to review the allocation of the estate and/or inheritance tax burden?
Do you have a plan for your digital assets and information?
Does your Will refer to a tangible personal property memo?
If so, ensure that you have completed the memo according to your wishes.
Do you need to review your Trustee/Co-Trustee appointments and successors?
If so, consider the following:
Do you have beneficiaries with special needs?
Do you need to review the allocation of the estate and/or inheritance tax burden for assets passing under your trust?
Does your Will pour over into your trust?
Did you, or do you need to, fund your trust during your lifetime?
If so, consider what assets to convey to your trust, and when. Trust-owned assets will avoid probate at your death.
Do you have an ILIT?
If so, confirm that the Trustee is properly administering the trust, all premiums are properly paid, and any Crummey Notices are timely issued (if applicable).
Do you have a split-interest trust, such as a CRT or CLT?
If so, confirm that the Trustee is properly administering the trust, and annual payments are properly calculated and made.
Do you have a SLAT or a GRAT?
If so, confirm that the Trustee is properly administering the trust, and that actions do not risk inclusion in your taxable estate.
Do you have a QPRT?
If so, monitor the term of the trust, and plan for the transfer of ownership and the possible need to rent back the residence, observing proper formalities.
Do you need to confirm that income tax returns are properly filed for your irrevocable trust(s)?
Are your actions consistent with the terms of your trust?
If you have a premarital agreement, do you need to ensure that your estate plan is in alignment?
Do you need to review your non-probate transfers, to ensure that they align with the planning under your Will and trust?
If so, consider the following:
Do you need to add flexibility to your plan (e.g., by designating a trust protector), to allow changes should unforeseen circumstances arise in the future?
Are you concerned about a future Will or trust contest?
If you have any questions after reviewing this checklist, please reach out to our professional team anytime at hello@impactadvisorsgroup.com or (833) 5IMPACT.
This checklist was prepared and first distributed by fp PATHFINDER.
Four self-inflicted biases that knock a number of investors off-course are anchoring, blind spot, confirmation and familiarity bias.
Legendary economist Benjamin Graham once stated that ‘your own behavioral biases are often the greatest threat to your financial well-being.’
If you file tax returns separately AND are separated from your partner, colleges consider you a two-household family.
Take some time to map out how to pay for all four years before your student gets the bill for freshman year.