With all of the changes going on in the world today, it’s hard to make any type of plan with confidence. From trying to plan a vacation for next year amidst the COVID-19 pandemic to simply deciding where you want to go to dinner because the restaurant might be at full capacity according to CDC guidelines… These unprecedented times have made it clear that life is uncertain, and sometimes plans have to bend to the circumstances.
If that’s the case, the same would be true for your financial and estate plans, right?
In a recent episode of our Wealth Matters radio show, our partners Craig Frankel and LeAnne Gilbert were joined by special guests Christopher Shoukry, CFA of Alex. Brown, a division of Raymond James and Joseph Sillitto of Page, Scrantom, Sprouse, Tucker & Ford, P.C. to discuss the importance of financial planning during this time and how to best navigate that process.
Here are some of the key takeaways from their discussion.
What is a Financial Plan?
Before we can dive into why having a financial plan is important, we must first define what exactly this document is. According to Christopher, a financial plan accomplishes three things:
- Provides a snapshot of your current state of affairs (assets, liabilities, cash flows)
- Articulates and formalizes several financial objectives and goals
- Implements strategies to achieve each financial objective
Essentially, this document is a blueprint to help people understand where they are, where they want to go, and ultimately how to get there.
How is a Financial Plan Different from an Estate Plan?
The financial plan is actually a great help in creating an estate plan because most people forget how they have titled their assets. Knowing this information along with how much the assets are worth is a huge piece in creating an estate plan that’s actually worth something.
“First and foremost, a financial plan takes stock of what people have: what the assets are, how they are owned, how they are titled, what the beneficiary designations are, etc,” Joseph explains. “The estate plan then focuses on how those assets might be managed during a person’s life and ultimately how they will be transferred when that person passes away.”
Christopher adds, “The purpose of having both of these documents is ultimately to create clarity. A financial plan is mostly about the monetary objectives during your lifetime and while you’re fully cognitive, while an estate plan more so focuses on what will happen should you become incapacitated or pass away.”
How Often Should You Review These Documents?
In our experience, we’ve heard some suggest that people should revisit their financial and estate plans every seven years – some even say every five, and some say something totally different.
A good rule of thumb is to come back to these documents every time there’s a significant life event: a marriage or divorce, the birth of a new child, a death, a change in the economy, etc. While there’s nothing wrong with scheduling a review every X number of years, you want to make sure that these documents stay up-to-date with substantial life changes.
“It’s nearly impossible to create the perfect financial plan that will last you throughout your lifetime,” says Joseph. “My advice here is, don’t let the perfect be the enemy of the good. Having any type of plan is better than not having one at all, and you can move closer to ‘perfection’ as the years go on.”
To hear more tips on navigating the financial and estate planning process during these times of uncertainty, watch the full episode of Wealth Matters here.
Gaslowitz Frankel LLC is the Southeast’s premier fiduciary litigation law firm. Our legal team specializes in all aspects of fiduciary disputes representing individuals, executors, trustees, investors, shareholders, and corporate fiduciaries in complex fiduciary disputes involving wills, estates, trusts, guardianships, and businesses. If you are involved in a fiduciary dispute, contact us for a consultation.
