The three-legged stool approach to estate planning is beneficial for getting the most out of your estate plan. This means that your estate planning attorney will collaborate with your financial advisor and accountant to ensure you have the best strategy to secure your future.
We would be happy to guide you through the estate planning process. Call us today or contact us online to schedule an appointment.
~ Wendy Guthro, Attorney & Counsellor at Law
"I do believe that in order to be a successful negotiator that as a diplomat, you have to be able to put yourself into the other person's shoes. Unless you can understand what is motivating them, you are never going to be able to figure out how to solve a particular problem."
~ Madeleine Albright
The Benefits of the Three-Legged Stool Approach to Estate Planning
Many of us tend to put our needs into individual compartments. If we need advice on whether it’s time to sell an investment, we consult a financial advisor. If we are trying to develop a long-range, sophisticated tax strategy, we consult an accountant or CPA. If we want to provide for our family by putting our affairs in order, we consult an estate planning attorney.
These actions, and the decisions that go into them, need to be considered from more than one perspective. For example, the sale of an asset from an investment account may result in a capital gain tax. Although that sale may have met your financial goal, it may be detrimental to your tax plan. If your financial advisor moves around your assets, it’s important to communicate this to your attorney in case changes to your estate plan are necessary.
A more holistic, integrated process of reaching your financial, legal, and tax goals is to use the three-legged stool approach. Your estate planning attorney should have open lines of communication and coordinate with your financial advisor and accountant anytime their work overlaps. These three professionals are the legs to the stool and should form “Your Team” to ensure that you have the best financial, legal, and tax advice.
The Importance of Different Advisors
Why do you need to work with all three types of advisors? Estate planning attorneys develop tax planning Trusts all the time, don’t they? Accountants must surely understand investment opportunities. Financial Advisors must understand the resulting tax burden from selling an investment. As experienced as each professional is in their own wheelhouse, one advisor cannot maintain the expertise to counsel you in all three areas.
Why Communication Is Important
In our practice, we ask each client for the contact information of their advisors and encourage clients to sign a release so that we may discuss their estate plan and share information with their advisors. When your professional advisors are sharing information, they can catch potential problems or opportunities that they might not have been able to see alone. Communication is important to ensure “Your Team” works together to understand what the other is doing and to support your goals.
Your financial advisor might suggest moves in your portfolio to take advantage of tax losses that your accountant has already used up. Your accountant might not be aware that you transferred assets into an irrevocable Trust for asset protection. To avoid mistakes and to take advantage of the best opportunities, your advisors need to understand your goals and coordinate strategies accordingly.
An Example of the Three-Legged Stool Approach
With a federal and state government that is always strapped for cash and looking for additional revenue, the gift and estate tax thresholds are always up for review. The current federal exemption limits are set to expire in 2025 and thus might lower the exemptions substantially, subjecting many more families to estate tax. A financial advisor, accountant, and estate planning attorney can work together to develop a gifting plan or other strategies to prepare for what could happen in 2025 and beyond.
Talk to Your Estate Planning Attorney About the Three-Legged Stool Approach
The three-legged stool approach does not require your accountant, financial advisor, and estate planning attorney to work together every day. But they should be willing to communicate and understand that their work does not take place in a vacuum.
At Guthro Law, we regularly consult with financial planners and accountants, and we recommend the three-legged stool approach as the best means to develop a comprehensive estate plan that will meet your needs far into the future. We’d be happy to talk to you about it—just contact us to set up a consultation.
Funding a Trust means you transfer ownership of assets to the Trustee of the Trust which will avoid Probate of those assets. This month, we would like to provide tips on funding a Trust with bank accounts or other financial accounts.
While most bank and financial accounts can be transferred to a Trust, each institution has a dedicated process for conducting such transactions, so always start by contacting your bank or financial institution about their policies.
Here are general steps for funding a Trust with bank accounts and other financial accounts:
Your financial institution should provide you with the necessary forms to transfer your accounts into the Trust. You will likely have to appear in person to complete these forms.
Your financial institution will ask for your “original’ Trust document. Some banks may accept your Certificate of Trust in lieu of the original trust.
Have your financial institution change the name (title) on your account to the Trustee of the Trust. Some financial institutions allow you to change account ownership to the Trust and keep the same account numbers, while others require a new account to be opened.
Wendy Guthro Presented at the Burlington Council on Aging’s Lunch & Learn Series
In February, Wendy Guthro visited the Senior Center to present at the Burlington Council on Aging’s first Lunch & Learn series, “For the Love of Family Estate Planning.” The program included a walk-through of what an estate plan would look like and examples of essential documents that will prepare someone for unplanned events up until the end of life.
To learn more about the upcoming lunch and learn events, click on the button below.
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Photo Highlight from My Trip to Sebago Lake State Park
Snowshoeing in Sebago Lake
As everyone celebrates the beginning of spring and looks forward to warmer weather, I enjoy the memories of my winter outdoor snowshoeing trip at Sebago Lake in Maine. What an excellent way to recharge and become one with the great outdoors!
We Welcome Referrals
To provide clients with optimum service, we focus our practice on Estate Planning, Estate & Trust Administration, Probate, Asset Protection and Elder Law issues. If you have a question, need advice or counsel, contact us online or call 781-229-0555.
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Attorney and Counsellor at Law
Seventeen Treetop Court Burlington, Massachusetts 01803 United States
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