Recognizing National Mentoring Month: This January, consider these ways to become an estate planning mentor.

If you have children or young loved ones you hold close, you can make a large impact on their development by sharing knowledge to help them succeed in life. January is National Mentoring Month, and there’s no better time to help mentees form goals that will put them ahead of the curve.

An elderly grandfather bestows knowledge to a young grandson.

Usually when estate planning is mentioned, we default to the notion that it only relates to a person passing, or when someone is preparing to transfer assets to loved ones. While these scenarios are definitely part of estate planning, it also involves the development of good habits throughout your whole adult life. This is where mentoring comes in. Teaching your children and other young family members the value of financial and estate planning now can help them in the long run. Here are some ways you can implement teachings and set them up for success:

1. Assist your mentee in reaching their goals by giving small gifts over time.

Start by teaching them the importance of setting goals and how to set them for themselves. For instance, if they want to start a business or pay for college in the future, help them set up a savings or investment account and incentivize regular deposits by matching a portion of their contributions. If they want to give to a charitable cause, match their donations to encourage them. By helping them achieve their goals through their own efforts, they will learn valuable lessons and benefit from the experience. Share your own experiences and lessons learned when pursuing similar goals to further aid in their success.

2. Prepare your mentee to inherit a specific item by educating them about it.

For example, if you plan to pass on a family cabin to your children, give them information on how to maintain it and create a schedule for taking care of it. Share your knowledge and experience you gained caring for it growing up. If you and your siblings were responsible for the cabin growing up, teach them the best ways you found to work together as a team to care for the property. Along with providing practical information, share personal stories and memories about your own experiences at the cabin to communicate its importance and why you want them to have similar positive experiences once it’s passed down to the next generation.

3. Pass on valuable skills to your mentee that you have acquired and consider important.

Share the lessons you learned from your parents about saving money or contributing to good causes. If you have developed money management skills that have helped you build a significant estate and benefit your family and others, invest time in teaching those skills to your mentee. Similarly, if you have found effective ways to evaluate the credibility of charities and make responsible donations, share that knowledge with your mentee so they can make informed decisions. Emphasize to your mentee how these skills have positively impacted your life and the lives of others to stress their importance and the value of learning them.

Need a Professional Mentor? Contact AD&R

Mentoring in a creative way allows you to pass on more than just your assets to your loved ones. You can also share your core values, skills and experiences gained from putting them into practice. If you wish to leave a lasting legacy for your family and loved ones by creating or updating your life plan, reach out to Anderson, Dorn & Rader for help.

It is important to understand that estate planning documents do not exist in a vacuum. Estate planning is one of the most technical and dynamic areas of the law.  Properly planning an estate requires consideration of federal and state tax issues, state property law, state probate law and state trust law.  Estate planning documents must be carefully customized to meet each individual’s unique circumstances and objectives.  If they are not, unintended, and often costly, consequences may result.
Suppose you use a generic template that you find online to create a last will and testament or revocable living trust.  Are you sure that the documents that you wind up with will stand up to any challenges that may present themselves after your death?  Are you sure the tax sensitive provisions of your documents have been properly considered for your particular circumstances?  Could there be conflicting clauses that require your family to go to court to interpret the document after you have passed?  Has the document been thoughtfully drafted under state law so that your beneficiaries’ inheritances are protected from a divorcing spouse or other potential creditors?
Another thing to consider is best explained by way of example. Let's say that you never played golf before. You look into the bag and you see a lot of clubs, but you really don't know what club you should use. You may not use the right clubs as you try to negotiate the course without any information.  The same is true of estate planning. There are numerous different legal instruments that can be utilized.  Just arbitrarily deciding which ones you are going to use in a DIY last will and testament or revocable living trust is simply reckless.
These are a few things to think about, but if you would like to learn more of the facts we urge you to download our free report on DIY estate planning.  This special report goes into a good bit of detail about the dangers of do-it-yourself wills and living trusts.
We urge you to download your copy of the report. Access will be granted if you follow the simple instructions that you see after clicking this link: The Dangers of DIY Wills & Living Trusts.

There are DIY legal document sites on the Internet that sell generic fill-in-the-blanks legal documents including last wills. Another type of do-it-yourself estate planning involves the use of joint ownership. It is possible to add a co-account holder to your brokerage and/or bank accounts. If you do this the co-owner would be the only owner of the assets in these accounts at the time of your passing. You could instruct this individual to distribute this remainder to other people of your choosing. Voilà, you have an estate plan in place (or so the story goes).
There are difficulties with this strategy of joint ownership. Clearly you are going to choose a joint owner that you think you can trust. Be that as it may, you have no guarantees regarding what this person does with the money after you pass away. He or she may not agree with your inheritance ideas. As a result individuals that you care about may ultimately be disinherited. There is also the matter of creditors. If your co-owner was to accrue debt his or her creditors could seek to attach or lien property that is held jointly. The same is true of anyone who may be suing the co-owner for one reason or another. In the case of divorce a departing spouse could target these funds as well. Then there is the issue of a loss of the full step up in basis of appreciated assets.
Joint ownership is not a truly viable alternative to a properly constructed estate plan. Discuss these matters with a qualified estate planning attorney to be sure that your wishes become a reality after you pass away.

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