Proper planning Featured

7:00pm EDT January 30, 2006
There has been a rise in the number of people interested in estate planning in the past year because of legal battles, such as the Terri Schiavo case, where such plans would have played a crucial role. People often mistakenly equate estate planning with a death scenario and may deem the process too costly and time-consuming.

It can be a pay now or pay later scenario, says Douglas Walouke, a vice president and financial consultant with Hilliard Lyons. Walouke is also a Chartered Financial Analyst(r) and a Chartered Wealth Advisor.(r) “What is the cost of not having a plan is what people should consider,” he says.

Smart Business spoke with Walouke about how a person can plan their own estate and the benefits of such a plan.

What does estate planning mean?
When planning their estate, a person should approach the situation with the goal to, ‘Control my property while I am alive and well; plan for my loved ones and (myself) in case I become disabled; be able to give what I want, to whom I want, when I want, the way I want and do that at costs which are fully disclosed to me and to those I love.’”

What does an estate plan include?
An estate plan includes things such as how a person’s assets are currently titled and invested, in the event of disability how assets are used to care for one’s self and family, and in the event of death how assets are to be disbursed and how children are to be cared for. An estate plan should also include detailed financial plans for funding retirement and education.

When should a person start planning?
If the goals I previously mentioned have not yet been achieved, it is time to start planning.

An important thing for people to realize about an estate plan is that it is revocable. This means that documents can be changed as people move through various stages of life and acquire more assets and experience changing priorities.

Most people equate an estate plan with a will, but an estate plan is important to have when you are alive. A person is six to seven times more likely to become seriously disabled than to die prematurely. An estate plan would become effective in such instances and would determine the distribution of current assets.

It is more about taking care of yourself, not in a selfish way, but in the sense that you remove the burden of decision making from someone else.

How does developing an estate plan benefit an individual?
If an estate is not planned, the state will have a plan of its own that will be costly, in terms of both probate and taxation costs, and is not likely to be what a person would have wanted. Also, if a person has an estate plan with assets held within trusts, they can avoid probate.

A will must go through the probate court, making it public record, and can be contested. By using trusts, you prevent assets from going through this process and keep information private. For some people, there is even a certain weight lifted from their shoulders when they know that they have designed a plan that will be carried out the way they wish.

How can a person design a plan that is in their best interest?
I recommend that people find professionals who take a collaborative approach to estate and financial planning. Finding professionals who ascribe to a collaborative approach is beneficial. The professionals should include a financial consultant, an estate-planning attorney and an accountant.

Who should a person contact and what should a person have prepared to start planning?
Ultimately, people will need an attorney to help prepare an estate and draw up the proper trust documents. In wealth management practice, financial planners work closely with estate planning attorneys to make sure clients cover all their bases. I recommend that a person look for a planner with credentials. It is important to find advisers who can admit they do not have all of the answers, but who can direct you to and work with people who can help.

Financial consultants need to know every asset an individual owns in order to manage their affairs effectively — bank statements, investments, insurance policies, tax returns and 401(k) plans. Allow these (consultants) to know about any family situations that may determine the way their money is handled, such as a child with a disability.

Doug Walouke is a vice president and financial consultant with Hilliard Lyons. Walouke is also a Chartered Financial Analyst(r) and a Chartered Wealth Advisor.(r) He can be reached for further information on financial planning at or (800) 285-9667.