As you move forward in your pursuit of effective Personal Values-Based Estate Planning it is vital to keep your focus on what is really important to your family and not get caught up in the “money-only” paradigm.

Many people believe that the more money you make the better off you are. As the old song said:

Once again, it is important to have a realistic long-term projection of your assets and the probable ultimate tax consequences of all cash flows and transfers. The difference in what winds up where you want it and how it serves you along the way can be enormous. The earlier you see the differences in proper strategic asset registration and cash flow control, the greater the impact you can make on your bottom line Net⁴ result.

The most productive order for solving personal values-based financial and estate planning problems is:

1. Personal Values
2. Cash
3. Risk
4. Taxes

Maintaining Control and Access

Freedom from fear or worry that is the meaning of the French root word for “security”. Fear is often equated with lack of control and things unknown. Independence is nearly synonymous with control; dependence means having someone else in control. Planning for your family’s security means reducing the unknown and increasing your feeling of control.

In fact, advisors who deal with super-wealthy immigrants fleeing persecution or war torn homelands often report that such people are primarily interested in only two things: Control and Access. Having personally experienced the near-loss of both, these people understand the importance of control and access as no others can.

For here and now planning, these are two very critical issues. If you are not personally able to exercise control, then who will? Likewise, if you are not personally able to access the resources for immediate needs, who can?

Control and Access are also extremely important in estate planning. In order to reduce costs and gain an estate transfer advantage you need to know how much control and/or access you will have to give up to implement any given strategy.

The answers to these important questions vary greatly depending on the type of asset, whose name it is in, and what asset control strategy is used. Even though you may have more than enough resources to meet any problem or emergency, it is still a disaster if they cannot be used effectively. This is another strong argument for using the ASSET CONTROL – Personal Values-Based Estate Planning Control Record.

Taking Care of Number One - Not Being a Burden

Recent mortality rates tables indicate that at age 65, your probability of living to age 70 is 90%, living to age 80 is 62% and living to age 90 is 22%.  As you know, these figures are somewhat higher for females. This is the good news, but it is also the bad news. It is nice to know that at age 65 you could live on for another 20 to 25 or even more years.

This leads to a whole new set of worries stemming from increased longevity. One study, reported in the September 2005 issues of Registered Rep Magazine of investors with net investment assets exceeding $500,000 stated that nearly 80% were concerned with making sure their heirs were taken care of - that is, not being a burden. Further, 77% were concerned with having adequate medical coverage and 71% were concerned with having enough money in retirement. Another big issue not directly covered in this study is the potential cost of long-term health care.

There are two separate, but equally important parts to solving these issues. The first is obviously how do you make sure you will have enough money to meet these potential needs before making any asset transfer decisions? The second is how do you make sure that somebody who has your best interest at heart is in a position to take control of your financial and medical matters if you are not able?

Financial Issues: To solve the financial part of the equation there are several strategies that may increase your comfort level. These include:

• Medical Insurance Coverage - If you are still employed, how will your coverage be affected when you retire or leave the company? Do you have a plan of action if the company decides to drop such coverage?
• Medicare Parts A, B, D and Medicare Supplements - Are you making optimum use of these coverages?
• Long-term Care Insurance - Have you evaluated the potential need for such coverage in conjunction with its cost and your ability to pay your own way?
• Medicaid Assistance - Those who are unable to cover the cost of extended long-term nursing care may be forced to turn to Medicaid. The restrictive laws may have an effect on your family gifting and estate plans.

In order to address these concerns, you need to have some realistic method to determine your potential exposure to these problems and to evaluate your ability to meet them.

Personal Care Issues: These issues are addressed in the section on Taking Care of the Here and Now regarding Advance Directives and Planned Succession Management. While these are important at any age, their importance is multiplied as you grow older and the probability of needing help increases dramatically.