Why Estate Maximization And Planning?
Why Estate Maximization Succeeds Where Most Estate Planning Fails
By Jon Kubler
Do you know that estate plans almost never achieve their objectives and understand why Estate Maximization does? Are you also aware that estate planners themselves recognize and expect that most estate plans are bound for failure before their estate planning even begins?…
In other words, the estate planning attorney that you engage and enlist (hire), in almost all cases, begins their assignment aware and already anticipating that it won’t end nearly as well as you’d like and expect.
Are you thinking, “That makes little sense.”, or “Why, on heaven’s earth, could that possibly be?”
Well, it’s entirely accurate. And my explanation for it starts within the results of a survey…
Estate planning disasters are so widespread that Private Wealth Magazine, in 2003, 2008 and again in 2015, surveyed attorneys and high net worth individuals to analyze this historical problem from both sides of the engagement. The magazine found many answers from the surveys and also determined that the problem is progressively getting worse over the years.
Some of their discoveries:
- 55% of surveyed individuals said their estate plans were overly complicated, and, at the same time, incomplete and not thorough
- Over 95% (both attorneys and individuals) said they could sense that the “plan” would not really satisfy what the estate owner actually wanted to accomplish
- Almost all felt the estate plan was not explained well (likely due to not being coherent, effective, complete and thorough)
- More than 93% of the individuals polled said their attorney made them feel “uneasy” (likely, at least partially, because the attorney was uneasy too)
This Is Both The Beginning And The Heart Of The Problem Too…
Imagine a somewhat typical, though relatively small, team of advisors:
- An estate planning attorney,
- Your accountant,
- A certified financial planner,
- Your business attorney,
- Life insurance professional,
- Your banker…
Using the above small group of professionals as an example, the estate planning attorney usually takes the lead for the purpose of planning the estate; as their title reflects.
And let’s also assume the six or more entities begin working together with the common goal being to construct a solid estate plan for you, the estate’s owner.
First, as logical as this seems on the surface, your estate planning is likely already off to a disastrous beginning. Under almost all circumstances, the estate planning attorney should not be the one taking the lead role. Rarely, will they possess the wide range of the financial skills necessary to comprehend and analyze your “big picture” with available possibilities for strategy. Per law, they are necessary, they do understand and construct wills, trusts and the other legal concepts and documents but typically aren’t familiar, qualified, nor equipped enough with an appropriate understanding in the areas of finance to plan a sound strategy.
Second, you have (at least) six kinds of professionals with six sets of varied skills along with six different visions, six agendas, six egos, six desires for power, six fees, six schedules, six personalities, and so on…
Only a person or firm that is an expert on finance and who also specializes in estate planning is able to manage this properly…
With the above scenario, you will have mustered a number of “moving parts’” without any one person, adequately knowledgeable of all facets (including financial and legal), developing working relationships, coordinating, communicating, being fully qualified and responsible for oversight of the others’ roles and responsibilities while at the same time having a vision and getting matters to the desired end result: A Successful Estate Maximization Plan…
Why Do Estate Plans Fail?
Can you see how it could be disjointed from the very start and setup to fail from the outset? Why? Because estate planning attorneys are technicians of the law, but not necessarily equipped for complicated financial models that many estates were built upon.
It’s pretty much broken from the beginning and has been for hundreds of years. Nobody is really qualified nor can strive to understand the big picture and, frankly, nobody is really all that able to cut through what it would take to engineer the right strategy for your estate anyway. But the problem begins with not having the most qualified person who has the necessary abilities to achieve the mission you’ve set forth to.
Who truly understands all of the necessary elements? Who is that one person, fully knowledgeable, in charge and coordinating? Who’s the one asking the right questions? Who’s holding the others responsible? Who ultimately “owns” the responsibility for achieving the overall objectives of your strategy and delivering the final estate plan to you? And who will explain it so you will know and understand it too?
Do you know your estate planning attorney well? How would you verify if that person genuinely understands or cares enough about your ultimate “bottom-line” objectives? Do you know all of the other people personally and also about their professional skills as it relates to effectively planning an estate?
Are your advisors speaking to you in terms of true estate maximization and financial positioning for estate planning purposes?…
Most people have just a general idea of why they need an estate plan and why it is so important. Sure, you want your estate to avoid unnecessary taxation, high probate costs, long delays and any other forms of waste. You also know that you want your loved ones protected and provided for. But these are very general aspirations.
You are looking to the estate planner to help you to understand what is possible, how to define your goals with you and refine whatever is needed to accomplish them. But most estate planners expect that you’ll already know what you want to occur and that cannot be your responsibility. Estate planning needs proper financial guidance.
You must have a strong, fully knowledgeable financial expert to “quarterback” your estate planning…
Even though estate planners may have put together numerous estate plans, he or she will assume that you generally want the same things and similar approaches as others have and plans like those will suffice for you too. But no two estates or situations are even remotely similar, making boilerplate type approaches highly inadequate.
Failing to get your estate planning right is a default to disaster…
Please know that it’s not a plot created by the estate planning industry, nor am I criticizing attorneys. And it’s not a lack of desire on anyone’s part either. In almost every case though, a “natural” sequence of engagement events creates the failing estate planning model. Typically, the wrong entity (company or person) assumes the quarterback position to develop the estate’s overall strategy. It has everything to do with not having the person with the correct financial qualifications leading the efforts and team.
What is necessary is the person or company that is expert in finance, experienced with complicated situations and who specializes in the estate planning process.
Wealthy individuals and families generally need estate strategists who will spend the time and get to know the specifics of their families, their business, their finances, their general goals and who possess the capabilities to guide them to maximizing their estate.
Only a customized approach and strategy developed by someone who understands all aspects (especially financial) can possibly develop and produce a successful estate maximization strategy.
Together they use that information to help formulate specific goals. Then Estate Maximization can begin on the road to fruition.
The complaint that the plans are too complicated is telling. Yes, estate planning can be complicated, especially because tax reduction is so important. But complicated should never be confused with being effective. If it is too complicated to explain then it’s probably not going to end well.
Yet, estate planning attorneys are typically unable to explain clearly how the plans as drafted or would achieve their goals. They are lawyers and typically not financially adept at the necessary level.
Most estate planners are professional technicians of the law and though they gain a certain level of knowledge of their clients and overall situations, they are weak with the most important aspects: finances and what is actually possible.
They might do a poor job of communicating how a plan achieves a client’s goals because they speak in legalese and assume clients have an inherent level of knowledge. But why would a client be able or even want to follow along with that?
They also might not take the time or ask enough to learn about your true goals.
It takes time to feel comfortable enough to want to open up about the details of your family, your finances, goals, and aspirations. It’s somewhat of an intimidating situation and an attorney’s use of estate planning jargon doesn’t help or alleviate much.
Estate planners tend to not devote the time and don’t ask enough questions or share enough or the most relevant information.
Certainly fundamental estate maximization techniques exist that apply and are beneficial under appropriate circumstances, but failing to take advantage of exemptions, exclusions and deductions sanctioned by the Internal Revenue Code are opportunities that shouldn’t be missed. With estate maximization, these opportunities are not missed and are always included to benefit your family and other heirs for generations to come.
The Solution Is This:
The first step towards maximizing your estate is to choose the right person or firm that is expert in finance and specializes in estate planning and maximization. This may seem like criticism, but unless the estate planning attorney has a very strong background in finance, it is a big mistake to bring one in with an expectation that he or she will be able to take the lead and construct an estate plan that will accomplish everything you desire. Naturally, they are licensed and they passed their bar, but typically aren’t familiar enough with the world of finance to strategize as well as you need.
By law, you do need an estate planning attorney involved who practices and understands the law and document the plan legally but you must first contact a solid financial company, such as Kubler Financial, that specializes in maximizing estates specifically for estate planning purposes; to formulate the actual strategy and also perform the periodic reviews and maintenance for you.
It’s important to engage with a company that thrives in finance first and also specializes in estate planning and maximization…
The ability to analyze deeper with regards to banking/lending, lines of credit for a business (if applicable), along with how real estate is structured, liquidity in bank accounts, etc., not only provides risk management for the estate, it also allows for maximizing the estate through other options that helps increase cash flow and reduces costs when putting the planning into place.
It also provides for flexibility on an annual basis when the plan is reviewed to ensure that more can be passed than was even intended, and for more generations, and if drastic changes should occur, the ability to adjust to these changes and ensure ongoing success for the estate with regards to other decisions you may make is easily available.
Maximization cannot occur without ongoing review of the estate. Planning is done up front, but, too often, not implemented nor maintained.
About Kubler Financial and Estate Maximization
Estate Maximization is derived from two main elements. The first is the confusion and cliche usage of the term “Estate Planning”, that generally starts with legal documents and is tied to tax code. “Estate Planning” is generally thought of, a majority of the time, as something that is associated with what happens after death with little emphasis usually placed on the “while living” benefits that exist and are available.
Estate Maximization illustrates how the intended results to one’s estate are envisioned immediately and places equal emphasis on “living and death.” It also clearly identifies and ties legal aspects and some accounting to financial efficiency while the “Maximization” strategy is developed and and accomplished using all available aspects of one’s current and future life.
Legal, accounting, small business management, investments, all insurances (property casualty, life, etc), banking, trust departments, etc., should all be considered and utilized when applicable…
This ties directly into my background and where 25 years of experience in all areas mentioned creates the ability to bring Estate Maximization to life for you.
The first meeting should be with me, the client and his, her or their estate/business attorney. Under most circumstances, the inaugural meeting would be to determine what type of planning is best for what your general aspirations are, how best to pass onto heirs/philanthropy, the current situation for Estate Maximization purposes, etc.
Why Estate Maximization? Because you should only have to create wealth once…
To expand the bottom line value of your estate and dictate where the assets go, you need an estate maximization plan…
I’m easy to reach and speak with and look forward to sharing more about Kubler Financial and Estate Maximization with you.
You can and should keep it in your family…
P.S. The time you spend with me will be rewarded with ideas and perspectives you’ll receive that will help enable you and your family to preserve its wealth long into the future. After all, they are your assets. You worked hard and deserve to keep them in your family!
We don’t circumvent and we work well with in-place legal, accounting and all other advisor team members whenever requested or otherwise professionally and ethically appropriate.