A Different Approach
VALUES CENTERED ESTATE PLANNING, PART TWO

In our first issue of Insight, we introduced the concept of Values Centered Estate Planning, an approach that integrates your fundamental ideals and values with your financial objectives to create a financial plan that does more than allocating assets.

By emphasizing what you value rather than simply what you own, values centered planning helps align your monetary objectives with your personal ideals -- to benefit you, your family, and the people and causes you care about.

Although you should consult an investment professional or tax attorney, this is not your first step. To develop an estate plan that is uniquely yours, the planning process must begin with you -- your thoughts and aspirations for yourself and your family, and your ideas on particular causes and charitable organizations that you might like to support.

The Values Centered approach to estate planning is a seven-step process, with each step building on the previous one. Steps one through four, discussed in our previous issue, initiate the gradual, reflective process key to the values centered approach. We will review those steps quickly, then describe steps 5, 6 and 7 in detail.

STEPS #1 TO 4

First, make a rough, conservative valuation of your assets. Then, based on that initial valuation, decide how much money and property you wish to leave to loved ones, excluding your spouse (because providing for your spouse will be considered later in the process) and determine what you wish to accomplish with the rest of your assets. These decisions will reflect your personal values. Next, build your knowledge base of financial and estate planning options and charitable giving techniques. (National-Academies.org/Insight is a good place to start.)

Only then, after completing these initial steps, should you consult an estate planning professional. Select a qualified professional who is experienced in the family and business matters of concern to you, and who has worked with estates approximately the same size as yours. Be sure that you are personally comfortable with your advisor, and that he or she takes time to help you understand your options clearly.

At this stage, also ascertain that your advisor understands what you wish to accomplish with your assets, and is prepared to assist you in providing not only for your financial goals, but for your values objectives as well. If you have difficulty finding a good advisor, consider doing a search for an estate planning attorney in your region at www.actec.org.

STEP #5: CRAFT YOUR PLAN

Your estate planning professional will make recommendations based on your assets and liabilities, your wishes for your family and loved ones, and your decisions about charitable organizations that reflect your values. This is the time when your spouse’s welfare should be considered most carefully.

Thoroughly investigate the specific estate planning vehicles and charitable giving techniques recommended by your advisor. There are many online resources -- including the National Academies’ estate planning site, (National-Academies.org/Insight) -- as well as useful books, such as -

J.K. Lasser's Estate Planning for Baby Boomers and Retirees: A Comprehensive Guide

to Estate Planning by Stewart H. Welch, III

and

Plan Your Estate: Absolutely Everything You Need to Know to Protect

Your Loved Ones by Denis Clifford and Cora Jordan.

Your research should prompt new questions, identify potential areas of concern to address with your advisor, and enable you to make improvements in the recommended plan.

STEP #6: IMPLEMENT YOUR PLAN

This is a significant point in the Estate Planning process -- many people, having developed a strategic plan, don’t take action on it. Be sure to follow through at this critical time.

To help your implementation efforts, ask your advisors to provide you with a step-by-step list of the actions necessary to put your plan into effect. Although the details will differ, key elements will probably include, among other things:

Ideally, there should be an ongoing, interactive dialogue between you and your advisory team regarding the management of your estate and its future allocation. So consider your advisors as your partners in the management of your estate plan -- with you continuing to be actively involved.

Remember that a good estate plan is continuously evolving and dynamic; it is not a finite event.

STEP #7: SHARE YOUR PLAN

A billboard for organ donation reads: “Think you’re an organ donor? Not if your family doesn’t know.” The same holds true for your estate plan.

Make sure that your family and other beneficiaries are aware of your intentions well in advance. Make sure they understand not just the technical details of your estate plan but the values that the plan is built on as well. Explain why and how you made decisions, and discuss the careful forethought behind your plan.

For example, if it is important to you that your grandchildren “make it on their own,” now is your opportunity to explain the stipulations in your plan that limit their inheritance to a college fund. If it is the wish of your heart to launch the career of a promising medical researcher whose work may one day contribute to curing a disease, let your loved ones know, and let them know why.

Telling your family in advance will allow them to ask questions, to seek out information on their own, and provide them the time to become comfortable with the aspects of your plan that will affect them. It can also be the beginning of a legacy that lasts through the generations, because enumerating your values to your loved ones may stir similar values and philanthropic aspirations in them.

It is important to inform all your beneficiaries of your intentions, and it is best to do so in writing. Your advisors can draft these letters for you. Whether you permit your generosity to be recognized, or prefer to remain anonymous, your advisors and the beneficiary’s administrators will work with you to honor your wishes.

YOUR OPPORTUNITY

It is never too soon or too late to begin the estate planning process. It doesn’t need to be overwhelming -- there are many resources to help you. But planning is necessary to ensure that your assets are allocated to reflect both your financial objectives and personal values.

Proactively thinking about what is most important and meaningful to you is your opportunity to craft a plan to provide financial support to family and heirs, while potentially establishing a true philanthropic legacy.

For more information, contact the National Academies Estate-based Philanthropy Program at giving@nationalacademies.org or 202-334-2431.

Check out other articles at the Insight on Estate Planning archive and Estate Planning News index pages.