Improving Financial Awareness and Literacy - Part 1

It starts with getting your estate planning house in order

Key Takeaways:

  • Estate planning is a very important component of everyone's financial plans.

  • Over 120 million Americans (that’s half your family and friends, business associates, and prospects) do not have up-to-date estate plans to protect themselves and their families.

  • You can't just talk about estate planning, because verbal agreements aren't legal.

Estate planning is an essential component of everyone's financial plans. Regardless of how large or modest your
wealth, estate planning is the only way to control what happens to your assets when you become disabled or pass away.

Estate planning is one of the most overlooked areas of personal financial management. An estimated 120 million Americans do not have up-to-date estate plans to protect themselves and their families in the event of sickness, accidents or untimely death. This costs the affluent and middle classes many wasted dollars and hours of emotional hardship each year that can be minimized with proper planning and action.

You can't just talk about estate planning, because verbal agreements aren't legal. You and/or your attorney need to put your wishes in writing and follow the proper formalities, or your documents may not be accepted.

If you are married (with a solid marriage), consider getting your adult kids and even your own parents involved in the process. It can bring your extended family closer and help avoid family friction and resentment down the road.

Here's how to save time and money on legal fees to get your estate planning house in order:

1. Gather personal and financial information

  • List full names and contact information for immediate family members.

  • List current financial advisors.

  • List assets and liabilities at current values.

  • Identify how title is held for each asset.

  • Gather beneficiary statements of your retirement plans.

  • Summarize current cash flow.

  • Gather employment benefits statements, life insurance policies, deeds to real property, partnership and business agreements, the past two years’ income tax returns, any divorce papers, premarital agreements, existing estate plan documents, and any other such documents.

  • Footnote any oddities, questions, concerns and thoughts.

2. Write out personal goals

  • Be sure to identify beneficiaries whom you want to inherit from you when you die. Specify how much, what percentage of assets or which specific assets go to each person or charity. Take note of the special needs of any beneficiary, such as a disability preventing work or an inability to manage money, and identify backup beneficiaries in case the first choices do not survive you.

  • If you don't have strong feelings about individuals, consider having them select a favorite charity or “cause” to be primary or secondary beneficiary.

  • Also consider the timing for distributions to designated recipients. Some beneficiaries can handle a large, lump-sum distribution. Others, such as children, benefit from distributions that are spread out over time.

  • Identify guardians or the person to raise minor children should both you and your spouse die or become incapacitated. Also, select guardians of the property to handle children's inherited assets. Identify backups too.

  • Identify executor(s) and trustee(s) to carry out your wishes after your death. You’ll need an executor to administer your will, and if you have trusts, you need to name a trustee(s) to manage them.

  • For each position, come up with several choices, because you don't know who will be willing and able to serve when the time comes. Consider selecting two or, for larger estates, three trustees as a check-and-balance system.

  • Identify other decision-makers to carry out health and money choices if you become incapacitated.

  • For special needs and concerns, list any sensitive family circumstances or concerns you have that may affect planning, such as prior marriages, ill parents, troubled kids, etc.

  • Note any questions, concerns and ideas you might have. If you are not sure about your plans, talk them over with a professional financial advisor who specializes in estate planning. This could be an AEP®, CPA, CFP/PFS, CFP®, ChFC®, CLU® or a trust officer.

3. Seek out the right attorney

An attorney is the only one who can draft the legal documents necessary to put an estate plan into effect. These are complex, highly important documents. Don’t try to be a do-it-yourselfer here or allow someone who is NOT a qualified estate planning attorney draft the appropriate documents for you. Identify several attorneys who specialize in estate planning by getting referrals from your AEP, CPA, CFP/PFS, CFP, ChFC, CLU, trust officer, banker, financial advisor and/or friends. Call the attorneys and ask how many wills and trusts they prepared this year and in the past 10 years for people with a net worth similar to yours. Ask whether they also handle estate administration after someone dies to see whether they're familiar with issues following a death.

Ask how they charge. Estate planning attorneys are specialists and can charge hourly rates of $100 to $500 or more, while others charge a flat fee for document preparation. Ask whether they will provide an introductory meeting with you and your advisor at no charge.


Above all else, make sure you and your other advisors are comfortable with the attorney, as he or she will be asking thought-provoking questions and discussing your personal affairs and wishes. In Part 2 of this article, we’ll discuss how to make the most out of meetings with estate planners, signing documents, and taking care of title and beneficiary designations.

Be an active participant in one of the most amazing, broad-based, multifaceted campaigns for improving financial awareness and financial literacy. This is an engaging and real winning approach to solving a major social challenge while taking your practice to the next level. The Financial Awareness Foundation has more helpful resources.

Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail


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