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At Mountain Peak Financial, Inc., we are dedicated to informing our clients and working closely with them to help develop the best financial strategies for their long-term goals. Our goal is to be the trusted lifetime advisor that helps our clients achieve the confidence they deserve for their financial futures.

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Mountain Peak Financial, Inc.  |  1425 W. Foothill Blvd., Ste 115, Upland, CA 91786 MAP  |  Tel: 909.982.2277

Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Mountain Peak Financial, Inc. are not affiliated companies.

Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. None of the information contained on this website shall constitute an offer to sell or solicit any offer to buy a security or any insurance product. Charles Ragonese CA LIC #0B02155, Firm LIC #0I088569

Any references to protection benefits, safety  or steady and reliable income streams on this website refer only to fixed insurance products. They do not refer, in any way, to securities or investment advisory products. Annuity guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. Annuities are insurance products that may be subject to fees, surrender charges and holding periods which vary by insurance company. Annuities are not FDIC insured.

The information and opinions contained in any of the material requested from this website are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. They are given for informational purposes only and are not a solicitation to buy or sell any of the products mentioned. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual's situation.

Neither the firm nor its agents or representatives may give tax or legal advice.  Individuals should consult with a qualified professional for guidance before making any purchasing decisions. Mountain Peak Financial is not affiliated with the US government or any governmental agency. 615813

© 2018 by Mountain Peak Financial, Inc.

Things to Know When Deciding to Put Off Creating & Updating Your Last Will

April 18, 2016

 

Meet Susie. Susie is 63 years old and has been working since she was 14. She grew up on her father’s farm and spent her Saturdays milking cows and collecting eggs – all the glamorous things that teenagers do on their weekends. She finished her education and went on to work for the next 43 years of her life. Somewhere along the way she fell in love, got married, and had a couple kids. She started from nothing and there were certainly times when it seemed like she was right back where she started, but through it all, one thing has been true. Susie built her own success. Everything that she worked her whole life for – that wasn’t luck. She lives in a beautiful house with her husband and dogs, and her kids still visit every Sunday. She owns two other houses that she rents out for additional income – because she’s a businesswoman! She donates to her favorite charity and helps her kids invest in their futures because she believes in the impact she can make on other people’s lives. She’s even planned for her retirement! She started contributing to her company’s provided 401k plan decades ago and now she’s getting ready to retire with a few hundred thousand dollars. Susie is all set.

 

I just have one question for our dear friend Susie today. Don’t be mad, but I’m going to ask her bluntly. Where is this all going after you die, Susie? All the assets that represent the fruit of your labor, your blood, sweat, and tears throughout the years – what is their fate when you are no longer around to take care of them? Maybe you have an idea of whom you want to entrust your assets to, but have you written it down? You know where I’m going with this.

 

Have you created a will?

LAST WILL: A written and signed legal document dictating how you want your assets to be distributed at the time of your death.

Do you have one of these handy things in your possession?

 

YES: you can skip down to the section titled “Update Updating Updated” (but you still might want to take a look at this section).

 

NO: keep reading from here.

 

WITHOUT A WILL

INTESTATE: Without a will.

In context: you die intestate if you die before creating/finishing/signing your will. Meaning, you’re not around to tell your family and friends who gets what and all hell breaks loose because everyone thinks they’re entitled to your best assets. Hey, we’re only human.

The two most dangerous things that can happen when you die without creating your will are as follows:

 

1. YOU LACK CONTROL OVER ASSET DISTRIBUTION: Maybe something gets overlooked, maybe no one wants that old rocking chair that’s been in your family for generations and held great sentimental value for you. But most importantly, without a will your assets are distributed according to the laws set in the state you live in, called “intestate succession” laws. If your family is fairly harmonious, this could be fine. But there’s also the chance that this could be treacherous, as your wishes may be completely different from what the laws require. Having a will allows you to avoid the state’s default plans and have your preferences carried out.

 

Visit Nolo online to read about the specific intestate succession laws in your state. If you don’t like what you read you’ll want to get started on your will immediately. It’s never too early.

 

2. YOU LEAVE YOUR FAMILY IN TURMOIL: Your family is already devastated. On top of planning your memorial and funeral, they also have to go through all your personal belongings, get in touch with your attorney and financial advisor, work with probate court to get your assets distributed, and so on. Leave them a plan telling them what your wishes are. It’ll make this at least a little easier for them, and give them some peace of mind knowing that they are fulfilling your wishes.

 

UPDATE UPDATING UPDATED

and not just your will, but all aspects of the estate.

————–

If you’ve made it down to this half of the article, you either have a will or you’ve VOWED to start immediately after you finish reading this article. At this point the most important thing to know is that creating your will is only half the battle. The other half? Making sure it’s updated at all times.

 

Let’s go back to our friend Susie. Susie has been investing in her 401k for a while now and has also purchased a life insurance policy. On each of these accounts she has designated different beneficiaries – her husband as the primary on her 401k, and her two children (50% each) on the life insurance. Well, now we find out that Susie very recently got divorced. Susie was smart – kind of. She updated her will to assign her 401k to her only brother and his family instead of her now ex-husband, Steve. But she forgot to remove him as the primary beneficiary on the 401k itself. After a tragic, unforeseen heart attack, Susie passes away.

 

Quiz time! Susie, who has recently passed away (our condolences ):  ) has a 401k of $500,000 (good for you, Susie!). Susie’s last will lists her brother as the beneficiary of the 401k. The 401k still names her ex-husband Steve as the beneficiary. Who gets the 401k?

 

The brother? You may be thinking, well it’s obvious that Susie doesn’t want Steve to get all her money so common sense just says it goes to her brother. WRONG. The law is the law, and the law says that the beneficiary designated on the account itself trumps any designation in the will. Although we’d all like to believe that the law would be understanding here, it isn’t. Steve gets all $500,000. Oops. And we thought Susie was ahead of the game!

 

Though we’re mostly discussing wills here, the truth is that there is much more to estate planning than just the will, and all the different aspects need to be consistent across the board.

NON-PROBATE PROPERTY: assets that are not passed through a will. This includes jointly owned property, trusts, annuities and retirement benefits, and life insurance. In other words, beneficiaries or co-owners named on any of these types of assets take precedence, regardless of what your will says.

Our friend Susie didn’t know about this law and so she didn’t even think to update her beneficiaries on the investment accounts themselves. And trust me, Susie is not the only one to whom this has happened. Don’t let it happen to you!

 

What to update:

Jointly owned property
Trusts
Annuities and retirement benefits
Life insurance
Last will

 

When to update:

After any major life event – divorce, marriage, birth of a child or grandchild, death of a family member who was included somewhere in your estate plan, upon becoming terminally ill, if you have any doubt that you missed something, etc. The answer is always.

 

EASY FIX – DO IT YOURSELF

 

On second thought, definitely DO NOT create your estate plan by yourself. Doing it yourself is just an easy fix, a cop out. You should now understand why it’s important to have a will and potentially even more important to update that will, and all aspects of your estate. As we learned from Susie, one little mistake can ruin everything. That’s exactly why you will want to have professional help on this.

 

I want you to take a moment to do a quick Google search (or whatever search engine you use). Type in the phrase “last will and testament.”  What are the first three search results (after the ads)?

 

Should look something like this:

 

 

Notice a trend? We are living in the age of DIY (do-it-yourself) everything. Though it’s tempting to use some of these sources above, especially because they’re all free, I’d encourage you to make the choice to search for a trusted attorney in your community. It’s not a matter of the credibility of these sources, because they could be very credible indeed. Rather, it comes down to how much you can trust yourself and how much you’re willing to risk if you make one small but detrimental mistake.

 

Wherever you’re at in your estate planning process, at the very least you should start by knowing what assets you have and where you want each to go after your death. Think about all the struggles you went through to gain these much valued assets throughout your life, and what your goals are for them to benefit your loved ones. After all, material possessions are worthless if no one can enjoy them!

Neither the firm nor its agents or representatives may give legal advice.  Individuals should consult with a qualified professional for guidance before making any purchasing decisions.

 

SOURCES:

Nolo: Intestate Succession

American Bar: Introduction to Wills

 

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