Create a Congruent Estate Plan

A core issue that surfaces in almost every congruency audit is the lack of enough education about what the plan is, what it means and what its Family values image, core value, legal documentsconsequences are. In fact, all planning should be congruent.

 

  •  Are you and your family prepared for what lies ahead?
  • Do you know what the core values of your family are?
  • Do new members marrying into the family know what the core values are?
  • Do they accept those core values?
  • Have these values been articulated?
  • Do all other family members also know what your core values are?
  • If there are issues that are affecting your core values, are you prepared to deal with them?
  • Have you set your goals?
  • Do you have up–to-date legal documents that enable your goals?
  • Do you have the right financial structure to facilitate those goals?
  • Do you have your team of advisors?
  • Is your plan congruent so that it relates back to your true north?
  • Have you established a system so that as life changes, your legacy is sustainable?

Let’s broaden some of those questions:

If you have minor children, do the persons named as guardians have your values? Do they understand what you would like your children to learn in life (not just for the time frame they are living with the guardians, but as part of the bigger legacy)? Have you provided the guardians with sufficient financial means to achieve the goals? Have you thought about the financial condition of the guardians? Will your children have more wealth than they have? If you intend that your children attend private school, should your estate also pay for their children to attend private school? Who is paying for family vacations? Is it your intent the now blended family continue on as one unit? How should any difference in wealth be addressed? Have you established the proper legal documents so that the guardians can effectively carry out their role?

If you own a business with partners or shareholders, what do your values say that about the business? Is it an investment; is it part of the family DNA to be put in the hands of the next generation? Is it up to the next generation to make the best decisions? How have you coordinated that with your goals and objectives? Are your estate taxes covered? Do you have key man insurance? Buyout insurance? Are your legal documents (trusts, shareholder agreements) current and up to date? Do you have a coordinated team of advisors? Has this plan been recently reviewed? Is your plan congruent with your values?

If your son or daughter is about to marry, what is the family feeling about your future in-law? Is it assumed that person is part of the family? Is there a dividing line between being part of the family and having access to the business or the money? Is there a dividing line between being part of the family business and money? Is the rule that an in-law benefits from the family as long as he/she is in it? Is it that the in-law will always be the mother/father of my grandchildren and therefore is part of the family? What are your goals and objectives as your family expands? Do you require prenuptial agreements to protect your family assets? Do you include in-laws as part of the estate planning process? Are your financial and legal documents up to date and congruent with the goals and objectives? Did you discuss this with your team of advisors, or did you sign standard documents?

If you are older and concerned about your ability to care for yourself and your finances, have you selected (individuals or institutions) to do so? Do they understand your values? Do they have the ability to carry out your goals and objectives (to stay at home, or live in nursing home) and pay for care? Have you arranged for the financial ability to implement that lifestyle and establish the proper legal documents, so that the persons in charge of your physical, custodial and medical care and the persons or institutions in charge of paying for the care are on the same page, and there is no conflict between those in charge of the purse strings and those in charge of the physical care? To what extent should family members be involved? As care givers? As overseers? Have you expressed your intent on these matters to those who will be making the decisions? Are you certain they are willing to take on these responsibilities?

None of these planning decisions should be made in a vacuum. When congruency does not occur, the foundation of the entire system can be disrupted. You will always need a team of expert advisors to assist you, but you must be the Captain, always aware of the true north of the compass to keep the plan on course. You should be planning to:

  • Focus on your family’s true north – its fundamental values – and understand that is the underpinning of all planning and legacy;
  • Look hard at your core issues, and if there is hard work that has to be done there, start the process of working on it;
  • Define the goals that build from true north and bring the family on the right course;
  • Implement your plan through proper and current legal documents, financial structures and a team of advisors;
  • Perform a congruency audit on what is currently in place to see where the black holes and opportunities exist; and
  • Develop a congruent system in which you, as the family leader and Captain of the ship, understand how to navigate these ever-changing elements to stay on the course that will enable your family to achieve sustainability and legacy.

This is just the bare minimum when planning for your family’s future. Find out more in my new book: It’s More than Money, Protect Your Legacy, available at Amazon.com. http://bit.ly/protectlegacy

 

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning. She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about. Annino recently released her new book, “It’s More Than Money, Protect Your Legacy” available at Amazon.com. To download Annino’s FREE eBook, Estate Planning 101 visit, http://www.patriciaannino.com.

The Congruency Audit Explained!

values plate image, family leader,Protecting your family’s legacy is much more challenging than it once was. The family leader must learn how to perform a congruency audit for your family. This may reveal technical issues, communication issues, fiduciary issues, tax issues, liquidity issues or a lack of coordination of the pieces of the puzzle.

It starts with an understanding of the fundamental values of the family – the true north. From that all else flows and the legacy builds. If the family does not have a clear idea of its values –what is in its DNA – then that is the first place that the family leader must start.

All else builds from that. Once the foundation is set, the goals and objectives must be charted. Once the goals and objectives are charted, then the enabling structures are crafted with the assistance of the team of advisors.

This is not the traditional way of thinking about legacy. Traditionally, the family leader goes to advisors one at a time to solve specific issues and does not touch base with the fundamental values. A family may go to the estate planning lawyer for wills and trusts, for example, and mainly focus on taxation… or go to an investment advisor and focus on conservative investments with minimal risk, failing to focus on the fact that part of the family’s net worth is in generational trusts, not for immediate use, and should be invested for growth.

A core issue that surfaces in almost every congruency audit is the lack of enough education about what the plan is, what it means and what its consequences are. In fact, all planning should be congruent.

  • Are you and your family prepared for what lies ahead?
  • Do you know what the core values of your family are?
  • Do new members marrying into the family know what the core values are?
  • Do they accept those core values?
  • Have these values been articulated?
  • Do all other family members also know what your core values are?
  • If there are issues that are affecting your core values, are you prepared to deal with them?
  • Have you set your goals?
  • Do you have up–to-date legal documents that enable your goals?
  • Do you have the right financial structure to facilitate those goals?
  • Do you have your team of advisors?
  • Is your plan congruent so that it relates back to your true north?
  • Have you established a system so that as life changes, your legacy is sustainable?
  • Let’s broaden some of those questions:

If you have minor children, do the persons named as guardians have your values? Do they understand what you would like your children to learn in life (not just for the time frame they are living with the guardians, but as part of the bigger legacy)?

Have you provided the guardians with sufficient financial means to achieve the goals? Have you thought about the financial condition of the guardians? Will your children have more wealth than they have? If you intend that your children attend private school, should your estate also pay for their children to attend private school? Who is paying for family vacations? Is it your intent the now blended family continue on as one unit? How should any difference in wealth be addressed? Have you established the proper legal documents so that the guardians can effectively carry out their role?

If you own a business with partners or shareholders, what do your values say that about the business? Is it an investment; is it part of the family DNA to be put in the hands of the next generation? Is it up to the next generation to make the best decisions? How have you coordinated that with your goals and objectives? Are your estate taxes covered? Do you have key man insurance? Buyout insurance? Are your legal documents (trusts, shareholder agreements) current and up to date? Do you have a coordinated team of advisors? Has this plan been recently reviewed? Is your plan congruent with your values?

If your son or daughter is about to marry, what is the family feeling about your future in-law? Is it assumed that person is part of the family? Is there a dividing line between being part of the family and having access to the business or the money? Is there a dividing line between being part of the family business and money? Is the rule that an in-law benefits from the family as long as he/she is in it? Is it that the in-law will always be the mother/father of my grandchildren and therefore is part of the family? What are your goals and objectives as your family expands? Do you require prenuptial agreements to protect your family assets? Do you include in-laws as part of the estate planning process? Are your financial and legal documents up to date and congruent with the goals and objectives? Did you discuss this with your team of advisors, or did you sign standard documents?

If you are older and concerned about your ability to care for yourself and your finances, have you selected (individuals or institutions) to do so? Do they understand your values? Do they have the ability to carry out your goals and objectives (to stay at home, or live in nursing home) and pay for care?

Have you arranged for the financial ability to implement that lifestyle and establish the proper legal documents, so that the persons in charge of your physical, custodial and medical care and the persons or institutions in charge of paying for the care are on the same page, and there is no conflict between those in charge of the purse strings and those in charge of the physical care? To what extent should family members be involved? As care givers? As overseers? Have you expressed your intent on these matters to those who will be making the decisions? Are you certain they are willing to take on these responsibilities?

None of these planning decisions should be made in a vacuum. When congruency does not occur, the foundation of the entire system can be disrupted. You will always need a team of expert advisors to assist you, but you must be the Captain, always aware of the true north of the compass to keep the plan on course.

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning. She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about. Annino recently released her new book, “It’s More Than Money, Protect Your Legacy” available at Amazon.com. To download Annino’s FREE eBook, Estate Planning 101 visit, http://www.patriciaannino.com.

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