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Giving Up Control Of Your Finances

What are your estate planning goals? Chances are, you’d like to maintain control over your assets while you’re alive, but you also want to devise a plan that will protect your loved ones if you become disabled. And you intend for your wealth to be distributed when, how, and to whom you want. Finally, you’d like to minimize erosion from federal and state estate and gift taxes.
In other words, you’d like to have your cake and eat it, too. It’s possible, but only if you decide to relinquish some control over your financial affairs. And that is often easier said than done. What’s difficult is that it’s likely to be someone else, not you, who will notice you’re beginning to slip a bit. But this is a sensitive issue, and even if your relatives realize that you need help with your finances, they may put off saying anything for years.
To avoid that situation, you may need to establish a system now that won’t put any single person on the spot. One solution advocated by Rick Randall, president of the National Network of Estate Planning Attorneys, is to create a “disability panel” with one or more medical professionals along with family members and a financial advisor. The group would observe you and decide when it’s time to transfer ownership of assets to a trust or other parties. In some cases, a relative you’ve given power of attorney might need to initiate legal proceedings to gain control over the assets.
It’s crucial to have a doctor involved, Randall says, to provide an expert opinion not only about your current health and cognitive status but also to project that into the future. Family members also play an essential role. They are the ones closest to your situation, and they can help determine when your medical condition and mental health may be deteriorating. And you can choose people you trust to take a compassionate, measured approach. Knowing you’ve selected these team members may help you accept their judgment even when it goes against your own feelings.
How control will be transferred also needs to be settled well ahead of time, as part of your overall estate planning. And with estate laws currently up in the air, plans and documents may have to be revisited periodically to make sure they conform to the latest laws and strategies. Various kinds of tax-favored trusts are likely to be part of the equation, and you’ll probably need to grant a durable power of attorney to someone you trust to act on your behalf.
Though looking ahead to the day when you’ll pass the torch is never easy, the benefits can be enormous, and it’s important to broach the subject with family members well before your health and competence become issues. We can work with you to establish a plan that meets your needs. 

This article was written by a professional financial journalist for Legend Financial Advisors, Inc. and is not intended as legal or investment advice.

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