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Let Your Values Be Your Guide :: Client Experience :: THE RETIREMENT SOURCE®
Let Your Values Be Your Guide

Let Your Values Be Your Guide

Your Unique Values System

Personal Values-Based Estate Planning means getting your money where you want it to go in ways that foster your unique values system. The entire area of estate planning, especially the tax aspects, is very unsettled now. Anyone with substantial assets who has not had a complete review of their estate plans in the past three years is very likely to be in need of several revisions. There is little doubt that more important changes are ahead. For this reason, it is wise to build in as much flexibility as possible.

It is important to keep in mind that every financial decision (and most other life decisions) involves trade-offs - such as financial risk, loss of control, loss of access or personal stress. There is no “right” way to resolve these conflicts.

You will most often achieve your highest level of personal satisfaction
with your plans if you remember to Let Your Values Be Your Guide.

Estate planning in the 21st century bears little resemblance to the planning done in the 1950s. In the first place the definition of family is radically different from the old notion of a husband and wife, two kids and a dog. Since people are living longer, many middle aged people are finding themselves in the position of having to assist in the care of aging parents as well as adult children and sometimes grandchildren at the same time.

With a national divorce rate of 50%, many families have become blended. That is, there may be a Brady Bunch configuration of his, hers and our children. In addition there are far more unmarried people living together, frequently with children from other relationships. These nontraditional configurations raise mind-boggling complexity in designing a values-based estate plan. Due to the fluidity of these relationships it is imperative to keep plans flexible and review them frequently. One method that many people find helpful is to sketch out a family tree of living members then decide how you would want each member treated in your estate distribution.

Many people are deciding to write values-based statements and directions into their ultimate distribution documents. Out of concern for the welfare of surviving family members, they are putting in place protective covenants and restrictions to assure that their values are passed along. Recognizing that having a large chunk of money dumped upon adult children who have had little experience with money may not be wise, many people choose one of several means of protecting heirs from themselves. These are done by using a trust (to be discussed later) with a trustee authorized to carry out the terms of these arrangements.

Sprinkling Distributions: One method is to have the inheritance sprinkled over a number of years. For example, the decedent's will or trust may stipulate that the heirs are to receive one-third at age 35, another third at age 45 and the balance at 55. During the periods between distributions they may receive income only.

Spendthrift Provisions: Sometimes people have a concern that their heirs are too loose with their money and might squander an inheritance and get into credit problems (The lottery winner effect). Or they might be too gullible and susceptible to be conned out of it through a bad investment, a bad marriage or a phony charity. This provision in a trust provides protection by trustee control over large distributions except under strict terms and prevents trust assets from being pledged for a loan or any other action that might imperil the principal.

Incentive Trusts: Some people are using their legacy to inspire certain positive behaviors in their heirs by placing incentive terms in their trusts. These provisions are enforceable only if they are in accord with public policy. For example, they cannot be used to keep an heir from marrying outside the deceased’s race or religion. They can be used to grant an additional bequest to an heir upon completing a college education or any other definable positive action.

Ethical Will: More and more people are becoming concerned with the idea of leaving a legacy of more than money to their heirs to make a difference that they had lived. An ethical will is a way to share your values with your family in the same way that a will or inheritance provides instructions for bequeathing your property. In it you can make personal comments to and about individual heirs and express your wishes and hopes for their future. You may choose to comment on things that were important to you such as the charities you supported. More information on this concept is available at

Keep in mind that all estate planning is complex - there are thousands of laws that vary from state to state and millions of court cases. All the ideas discussed in this booklet have been greatly simplified and should be considered as merely introductory. We are neither attorneys nor CPAs. Our job is to help you clearly define your personal values-based goals, identify potential problem areas, project your potential future financial status and to recommend strategies for your legal and tax advisors to consider. We believe that we can add a lot of value by doing the work that most other advisors do not do, but we leave the execution of these strategies to these experts.

Recognizing that all financial planning involves reviewing the alternatives and assessing the trade-offs, we developed the Values-Based Distribution GRID to illustrate the potential disposition of an estate. Those who plan improperly will have much of their financial legacy wind up on Quadrant IV. That is, going to pay lawyer fees, administration costs and taxes. Most people would prefer to see their estate go to family members or their favorite charities, not attorneys and the IRS.

When you consider the Values-Based Distribution GRID, you will see that it is fruitful to make the effort to move estate transfers out of Quadrant IV into Quadrants I and II. In the process of making such adjustments to your plans it is important to realize that many alternative strategies require significant tradeoffs in Control and/or Access. So it is worthwhile to review each potential strategy with respect to its impact on your Control and Access GRID.

Family Values
Community and
Charitable Values
Social Values
Questionable Values
(Taxes and Expenses)

Once you have your values-based guidelines firmly in mind, you will be better prepared to discuss potential strategies with your attorney if you are familiar with a few of the many available planning techniques. While tax issues are one of the considerations that could move a portion of your estate into Quadrant IV, few people will need to address that right now. So we will reserve the tax discussion till a bit later in this section. Since most people say, they just want all their stuff to pass on the way they want it done in the smoothest, simplest and least costly way, reduction of legal and administration expenses is of more immediate concern to virtually everybody.  

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