Ask the Expert: Demystifying Estate Planning

Sander Tom is a Trust Liaison Officer/Financial Advisor with more than 30 years of experience in the financial services industry. Over time, he has developed a deep understanding of estate planning and its powerful impact on a person’s life.

It’s not uncommon to put off some important financial decisions, including planning for your family’s future if something happens to you. We spoke with Sander Tom, CFP®, SchoolsFirst FCU Trust Liaison Officer about the importance of estate planning, and how having expertise in your corner can help make the process easier.

Q: According to a recent survey1, more than half of all Americans don’t have a basic estate plan in place. Why do you think this is?

Many people think that estate planning is just for the wealthy or is too complicated for their particular situation. But in reality, most people can benefit from a comprehensive review of their personal financial profile. The end result may involve the drafting of legal documents that are designed to carry out their wishes if they pass away or become incapacitated. This includes ensuring that their assets legally go to the people they designate, including their home, car and personal effects as well as life insurance policies, investments and pensions.

Q: What happens if someone doesn’t have an estate plan?

If you die without an estate plan, many of your assets may end up being distributed according to your state’s laws of intestate succession, which means the state defines the order of who will inherit, which may not align with your wishes.

Q: What is probate?

This is a court-supervised process to administrate a deceased person’s estate.  If you have a will, the probate court will determine its validity and this takes time, so the executor — the person you name in your will to manage your final affairs — will have to wait on the court before distributing estate assets to your beneficiaries. If you don’t have a will, this can take much longer. And because probate is a public process, you lose privacy.

Q: What is the difference between a will and trust?

Both are legal documents. A will sets forth how to distribute your assets upon your death.  It only takes effect after you pass away and won’t help if you become ill and can’t make your own financial decisions. A trust, on the other hand, allows your successor trustee — a trusted family member, friend or professional corporate institution named by you — to manage your assets for your beneficiaries in the event of your death or incapacity. In most cases, trusts avoid probate so your family can maintain privacy.  Also, they may be able to settle your trust and distribute trust assets more quickly versus assets subject to probate proceedings under a will.

Q: What is a revocable living trust?

A revocable living trust is created by you while you are living and carries out your wishes when you die or become incapacitated. It is revocable because you’re able to change your instructions as your life changes. Another benefit of a revocable living is the ability to bypass the probate court process.

 Q: What does a trustee do?

The trustee is the person you choose to carry out the terms of your trust. You can also designate a corporation as your primary or successor trustee. A corporate trustee has expertise and is regularly audited to ensure appropriate policies and procedures are in place to ensure your trust is administered properly.

Q: How can SchoolsFirst FCU help with estate planning?

When you schedule a complimentary one-on-one consultation with SchoolsFirst FCU, your financial advisor will look at your entire financial picture and develop a game plan for your future, ensuring your investment and insurance needs are covered. In addition, they’ll evaluate your estate planning needs and if appropriate, try to assist to connect you with a local estate-planning attorney.

While our team provides estate-planning guidance, we don’t draft wills, trusts or any other legal documents. However, we offer attorney-screening procedures to assist you in vetting estate-planning attorneys. We’ve also partnered with Members Trust Company, a national investment and trust services company owned by credit unions, to provide professional trust administration services to our Members.  For a reasonable fee, Members Trust Company will expertly administer trusts with a minimum balance of $150,000+, relieving your loved ones of this responsibility.

Don’t know where to start? Schedule an appointment with a financial advisor today. We’ll help you navigate a successful path and provide helpful resources along the way. You can either request a consultation online or call to make an appointment at 818.258.4116, option 2 Monday through Friday from 9 a.m. to 5 p.m. and Saturday 9 a.m. to 2 p.m.

 

 

  1. Source: Caring.com survey

Trust services available through Members Trust Company, a federal thrift regulated by the Office of the Comptroller of the Currency.

Securities sold, advisory services are offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor. CBSI is under contract with SchoolsFirst FCU to make securities available to Members. Not NCUA/NCUSIF/FDIC insured, may lose value, no financial institution guarantee. Not a deposit of any financial institution. CUNA Brokerage Services, Inc. is a registered broker/dealer in all fifty states of the United States of America.

 

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Extra Credit provides general information to help improve our Member’s financial lives. Every situation is different, so please contact us for guidance on your specific needs. The advice provided in Extra Credit is not intended to serve as a substitute for speaking to a loan representative, financial advisor, or BALANCE counselor who can help tailor a solution for you.

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