Host: Rob Miles, Senior Vice President, Wells Fargo Private Bank
Guest: Austin Bertrand, Senior Estate Advisory Specialist
Hello, I'm Rob Miles, Senior Vice President for Wells Fargo Private Bank, and this is "Your Financial Journey" — a podcast series that explores common financial issues that we all face. I'm joined today by Austin Bertrand, Senior Estate Advisory Specialist for Wells Fargo Estate Settlement Services, to discuss missteps to avoid in estate planning.
Austin, as an estate advisory specialist, you work with clients to help settle estates. What are some of the common missteps that you see?
Well, Rob, most people use trusts or wills to transfer their wealth, which is a good first step in estate planning. Having your wishes documented so your assets are distributed in the manner you want is important, versus having your loved ones figure out what you wanted after death.
That said, we see three key areas people tend to overlook in their estate planning: First, ignoring family discord; second, keeping estate plans up-to-date; and the third, neglecting to include gifts of personal property.
So Austin, are there steps that our audience can take to minimize potential family discord?
Absolutely, Rob. We often see issues arise when clients have not talked to their spouse, their children, or their other family members about why the will or trust was set up a certain way with the reasons for making a gift to a certain family member over another. Making your wishes clear to your family before your passing can help alleviate any family rifts — and potentially, litigation — if the plan isn't what they expected.
That makes a lot of sense, Austin. So if your child expects a particular amount and doesn't get that amount that can lead to resentment and disagreements within the family. Can you talk a little bit about keeping estate plans up to date? Why is that so important?
Sure. So, if you've recently experienced a significant life event, like getting remarried or the death of a spouse or child, your plan should be reviewed for any potential updates. Specifically, your plan might need to be revised to include or exclude certain family members from your estate. A common situation we see involves retirement assets, like IRAs or your insurance policies — often times a client might forget to remove a former spouse as a designated beneficiary of their retirement account. So you want to keep in mind that retirement assets are subject to complex laws and they transfer in different ways so it's critical to review your plan when your life circumstances change. Ultimately, conducting regular reviews of your estate plan, as well as all of your beneficiary designations, can help reduce estate settlement issues down the road.
Austin, to put it simply, estate plans should not be something where you set it and forget it. So it's imperative to review your estate plan on an ongoing basis as life changes. Let's now talk about including personal property in an estate plan. Should personal effects or family heirlooms be included in such a plan?
Great question. Yes, gifts of personal property like furniture, clothing, or artwork, should definitely be considered in your estate plan. While the actual value of these items may seem insignificant to an average person, the sentimental value of these items is likely to be priceless to your family. In that regard, documenting how you want your personal property to be distributed can help reduce conflict between beneficiaries.
And lastly, don't forget to include an inventory of your digital footprint, like your social media profiles, and don't forget gifts of your digital assets, such as the airline mileage you've accumulated over the years. These digital items, which are part of our everyday lives, are often overlooked in modern estate plans because most people only think of making gifts of traditional assets, like real estate, or investments, or even cash.
All good points Austin. So, to sum up for our listeners, the three things to consider in your estate plan to your point:
- Keep the family history in mind
- Update your estate plan as life changes
- Include personal property and digital assets as part of your plan
That's right, Rob. And I would also add that trust, estate, and probate laws are complex and they change frequently from state to state, so having a professional fiduciary in place can help with the estate settlement process.
Well, Austin, let me thank you for your time and sharing your perspective. This is useful information for all of us to keep in mind during the estate planning process and review. And thanks to our listeners for joining this podcast.
This is "Your Financial Journey."