June 27, 2018 Letter to Clients

Now that summer has finally arrived, many of us are looking forward to vacations and all the fun, leisurely activities that summer brings.  The slower pace of summer gives us more time with our families, friends and loved ones and often allows us to accomplish many tasks we’ve put aside throughout the year.  I am certainly looking forward to spending more time with my wife, Jodie, and our children, which always reminds me of how important it is to make sure they’re protected.  

Thinking about the inevitable is difficult and is a hard conversation to have. My role as your financial advisor is to focus on your overall financial plan, and it is important for us to remember that as part of that plan, we take steps to protect your legacy and all that you’ve worked so hard to build. In addition to our investment and market commentary, I wanted to take the opportunity to focus on and address the importance of estate planning, which is a critical component of your financial plan and overall financial well-being.

What is an estate plan and why is it important?

When you hear the term “estate” there may be a misconception that it only applies to individuals who have accumulated an extensive amount of wealth. Regardless of your net worth, you have an estate as your estate consists of everything you own including, but not limited to: your home, personal property, investments, bank accounts, retirement plans and interests in a business or partnership.  Establishing a written plan to provide instruction in the event you should become incapacitated and instruction for the distribution of your assets after you pass away lays the foundation of an estate plan and protects your family and finances.  

Without an estate plan, the courts will decide who will receive your assets and will also determine the guardianship of any minor dependents. While laws vary from state to state, it is worth noting that the courts may not automatically rule that the surviving spouse receive everything in the estate. This process, referred to as probate, can become very costly and can take years to settle. Creating an estate plan may seem daunting, but once in place you will have peace of mind knowing that your wishes will be fulfilled, and your loved ones will be protected.

What does an estate plan include?

I often say, “every client is like a fingerprint” meaning that every one of us has our own unique circumstances.  It is these varying circumstances that will dictate what estate planning documents you should have in place.  However, your estate plan should include at minimum beneficiary designations, a will, a durable power of attorney for financial decisions, and advance directives such as a medical directive and health care power of attorney.

Beneficiary Designations

The most basic, yet critical step everyone can take to protect loved ones is to ensure that the beneficiaries on life insurance policies, retirement and investment accounts, as well as bank accounts are current.  In my years of experience, I can say that it is all too common an occurrence that people assume that their beneficiary designations are up to date, particularly on employer retirement plans and life insurance policies.  Our firm has assisted many individuals who were unfortunately left with the emotional and burdensome task of settling a loved one’s estate who had not designated or updated their beneficiaries.  

With the hustle and bustle of life, it is very easy to overlook the important step of periodically reviewing beneficiaries.  If you have had a recent life change or would like to confirm your beneficiaries, kindly contact our office.

Will Power

The next step in estate planning involves writing a will to provide instructions on the distribution of your property and the guardianship of any dependents.  A will also includes naming a personal representative (executor) for the estate to oversee the terms of the will, identifying people or organizations whom you wish to receive gifts of money or specific possessions upon your death and establishing your wishes for your final arrangements.

When meeting with an estate attorney, you will be asked to consider the following questions as well as other possible questions, depending upon your situation:

  • Who will raise your children if both parents pass?
  • Who should inherit your money and at what percentages?
  • When should they receive the inheritance? All at once or over time?
  • Who will manage the money?
  • Do you want to place restrictions on some assets such as a business or property?
  • Do you wish to leave money to charity?
  • Who should receive important tangible assets? (e.g. jewelry, collectibles, family heirlooms)
  • Will there be enough liquidity to pay taxes?
  • Who will manage your social media accounts?
  • Who will take care of your pets?

A will is an instrument of power and gives you control over these decisions rather than allowing the state to make them on your behalf. When you’re working with your estate attorney, have a conversation with them on how often your will should be reviewed.  

Durable Power of Attorney

If you do not have a valid durable power of attorney for financial decisions and you become incapacitated, a court will appoint a guardian to manage your financial affairs including paying your living expenses or executing documents on your behalf. Without this document in place, not even your spouse is legally authorized to perform these duties.  A conversation should be held with your estate attorney to thoroughly discuss this document and what it entails, which may include limiting the power you give to the individual you select.

Advance Directives

In the event you are unable to make medical decisions for yourself, a doctor will be responsible for making these decisions on your behalf if you don’t have a designated agent or written instructions in place. By executing a medical directive (similar to a living will) and a health care power of attorney while you still have capacity, you can designate someone you trust to make decisions about your medical care without relying solely on the doctor’s judgment. A medical directive also instructs your agent and doctor under what circumstances you would like life-sustaining procedures stopped.

These decisions can be difficult to make, especially for family members, so having proper documents in place ensures your wishes are fulfilled and your family is not tasked with making them on your behalf.

The Bottom Line

For some, an estate plan may be as simple as taking the steps mentioned in this letter.  For others, it may involve taking additional action, such as establishing a trust, business succession plan or a review of life insurance coverage. 

While I recognize this is a lengthy letter and contains a great deal of information, the bottom line is that you’ve worked hard for all you have and as your financial advisor it is important to me that you are protected. Estate planning and financial planning go hand in hand, therefore we welcome the opportunity to collaborate with your current attorney.  If you should need a referral to one, our office is affiliated with local, highly respected attorneys with whom we can put you in contact. 

We can all agree that it is more exciting to plan trips and get togethers this time of year. With the slower pace of summer and the markets generally being uneventful, my hope is you may find time to give consideration to your estate plan. 

Speaking of the markets, I anticipate additional market activity throughout the coming months.  As the topic of trade dominates the news and while some stocks have been impacted by recent trade rhetoric, we continue to view this as a buying opportunity. Despite the media noise, the overall market looks healthy supported by global GDP growth, low inflation and impressive corporate earnings; and I remain optimistic for the markets in the remainder of 2018. Being that it is my practice to keep you informed of current market conditions and my outlook for the markets, our office will be sending an additional letter on further market commentary soon.

As always, please feel free to contact us with any questions or concerns you may have. We wish you a very enjoyable and relaxing summer.



Steve LePage


Cambridge does not offer tax or legal advice.