Although the scientific community is rife with debate about just how long people can live, there is no doubt that the increasing life expectancy of society large has shifted the way people—and their families—think about the future. Succession financial planning is an essential component to protecting your estate for your family. Learn how becoming your own banker can help you and your successor in the long run.

Establishing Your Estate Plan and Succession Financial Planning

Although we always hope to preserve as much of our health and wealth as possible as we age, when going through the process of succession financial planning and estate preparation, it’s important to acknowledge that there may be a time when you aren’t of sound mind or body. That’s where a successor comes in. Work with a Las Vegas financial planner to help you hammer out the goals for your estate and whom you want holding the reins.

The purpose and goal of succession financial planning advisory services

When you meet with an experienced financial advisor in Las Vegas, you’ll see we’re familiar with how effectively successors can protect the estate. Successors also provide protection to family, friends, business partners, and others who are reliant upon the estate when an individual becomes incapacitated. Because of the broad and nuanced authority granted to successor trustees and agents, it’s important that your successor fully understand the obligations and power that come with this crucial fiduciary role.

A successor or trustee will typically be named various ways, each with its own set of responsibilities:

  • Revocable trusts
  • “Pour-over” wills
  • Durable power of attorney for financial concerns
  • A durable power of attorney for health concerns.

 

What are the duties of a successor who is a trustee?

A trustee is granted authority through three different documents: the trust document, state statutes, and case law within the state that the trust is held.

 

Duties of a Trustee include:

  1. Preserve and protect all estate assets, including investments
  2. Exercise reasonable discretionary authority
  3. Act prudently as an investor
  4. Avoid conflicts of interest
  5. Administer the trust for all beneficiaries impartially
  6. Collect all trust receipts
  7. Maintain records of the trust’s income, principal accounts, and expenditures

What are the duties of a successor under a power of attorney?

Like trustees, the responsibilities of a successor under a power of attorney comes from the power of attorney document itself and state law.

 

Duties under a power of attorney:

  1. Avoid conflicts of interest that could impair the ability of the agent to act loyally for the estate’s best interests.
  2. Maintain the estate in good faith, with care, competence, and diligence in all matters.
  3. Make decisions based on the stated preferences of the principal and within the parameters of authority granted in the document.
  4. Maintain a separation between the principal’s money and property and that of the agent/successor.
  5. Maintain records of all receipts, documents, disbursements, and other significant actions. Booking must facilitate the delivery of required accounting documents to the principal and any party designated to receive an accounting, like a private wealth management firm.
  6. Protect the principal’s estate plan. This includes joint accounts, life insurance accounts, any established trusts, retirement accounts, or specified assets named in a will.

 

Keep in mind that an agent or successor under a power of attorney is a fiduciary role. As such, the role demands a higher standard of care and means family members and heirs can hold the agent legally responsible for their actions.

When does the power of a successor go into effect?

Although the timeline for when the power of a successor goes into effect can vary, the general standard for a successor agent or trustee to be granted the ability act begins with the “incapacity” or “disability” of the principal, i.e., the person whose estate the successor will be managing.

This can get tricky, as there is a variety of protection in place to prevent the unmerited usurpation of an estate from a capable principal. Typically, you will need to look at the succession financial planning document for the definition of ‘incapacity’ as it relates to any particular estate or principal.

Prepare for Tomorrow, Today with Alpha Omega Wealth

When completing your succession financial planning, make sure you and your successor are informed and empowered with the right financial perspective. Our financial planning Las Vegas firm has more than 150 years of experience we’re ready to put to work for you, today.

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