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Asset Control :: Retirement Success :: THE RETIREMENT SOURCE®
Asset Control

To most people independence means control. The worst consequences of not making a proper estate plan usually have nothing to do with taxes. Rather they deal with how well a person or the family can control his or her finances. That is why we prefer to think of it as succession and legacy planning. The test of this control comes under adverse circumstances. When disaster strikes, it is usually too late to plan. The best strategy for staying in control is to use a combination of Advance Directives and Planned Succession Management.

It is absolutely crucial to establish in advance Who Can If You Can’t! Matters of both your person and your property are handled by the Probate Court, which is an expensive and time-consuming place to have financial control issues settled.

This is true in dealing with both estates and matters of incapacity. Intelligent use of Advance Directives can reduce the emotional and financial burdens in these matters. Advance Directives in the broad sense include:

  • Durable Powers of Attorney
  • Wills
  • Trusts
  • Durable Health Care Powers of Attorney
  • Living Wills

The Durable Power of Attorney is important because it helps you control property in case something happens to you while you are living. A Will is only effective upon death.

A Will is an Advance Directive that allows you to state how you want your property distributed upon your death. It has no role for the living. Use of a Will guarantees property will pass through probate. Despite the tendency of many planners to totally avoid probate, there are certain advantages including clearing all potential creditor claims. Arguably everyone should have a current Will that is written for their own specific needs and coordinated with all other legal documents.

Trusts come in many sizes and shapes and can be very valuable for planning control while living and after death. Contrary to popular belief, not everyone needs a living trust. Certain types of trusts can have significant income and estate tax benefits. Others can be useful in planning for catastrophic health costs and other liability protection strategies.

The area of trust law is highly complex and is totally unsuited to do-it-
yourselfers or work by anyone other than a highly qualified attorney

Durable Powers of Attorney for Health Care are very valuable for preventing hassles if you are sick or incapacitated. They allow you name someone who has the legal authority to speak for you if you are unable as to what treatment you would be willing to accept or reject.

Living Wills allow you to state in advance how you would feel about using certain life sustaining procedures. Most states have standard forms for both of these Advance Directives available for the free use of all. Everyone who enters the hospital is made familiar with them. It is less traumatic to deal with these issues before going into a hospital. If you wish to include more direction than is given in these standard forms, you should have your own drafted by an attorney.

As with the other health care powers, you need to review them periodically to make sure they stay current with your wishes.

In our Asset Control strategy, Advance Directives are half the equation. The other half is Planned Succession Management. That includes having your financial management system and your legal empowerment documents accessible and understandable to those whom you choose to become successors. That, in turn, means they would not only have the power to do the job, but also would know what the job is and how to do it. The final part of your Asset Control strategy is to have a regularly scheduled progress review to make certain that all the parts continue to stay together.

Merely having the proper legal documents is insufficient. To maintain your quality of life by assuring the continued control of your assets it is necessary to make it possible for others to act in your stead. This Planned Succession Management includes:

  • A money management system a successor could assume
  • Written financial planning goals
  • A defined investment and management policy
  • Legally empowered successors
  • A regularly scheduled progress review

These succession management concepts are an integral part of the S-T-A-R-S System for Retirement SuccessSM. Use of the Risk Controlled Investing methods and the development of a plan for Simplified Money Management make continuity of management more effective.

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