The empiriKal partners© advisory team is comprised of specialists in all aspects of financial planning and investment services. I’m Edward Vela, and I was asked to write this month’s article because one of my specialties is Estate Planning.
While it’s important to have an exit plan for your business during your life, it’s essential to have one for your estate when you leave this planet. So far, nobody’s figured out how to take their estate with them. As one expert stated, “I’ve never seen a hearse pulling a U-Haul.”
Actor Luke Perry, perhaps more known as Dylan McKay to gen-Xers, was well known for his bad-boy appeal in the series Beverly Hills 90210. However, in his personal life, when it came to Estate Planning, Perry did many things right.
Sadly, Perry suffered a massive stroke at the young age of 52. After five days, his family agreed to terminate life support. One might think this decision happened in the moment. Nope! Perry established a Healthcare Directive when he was alive and well. He even directed that he be buried in an eco-friendly “mushroom suit,” designed to remove polluting toxins from his body while naturally breaking it down to nourish the earth. In addition to a Healthcare Directive, Perry established a Revocable Trust to pass assets efficiently and tax-favorably to his children.
Estate Planning can be a morbid subject for many Americans. Yet, it is perhaps the most essential element of financial planning. Sadly, a Forbes article headline reads, Despite Their Priorities, Nearly Half of Americans Over 55 Still Don’t Have a Will. Only 18% have these three additional Estate Planning Essentials: A Healthcare Directive, a Durable Power of Attorney, and a Revocable Trust. What makes these financial instruments essential?
Healthcare Directive – According to the Mayo Clinic, a Healthcare Directive is a written legal document that gives advance instructions if you cannot make decisions yourself. Advanced directives guide doctors and caregivers if you are terminally ill, seriously injured, in a coma, in late stages of dementia, or near the end of life. Forbes demonstrated how important this is and praised Perry’s foresight in an article titled, Luke Perry Protected His Family with Estate Planning. They reported that Perry had documented his wishes well in advance of his illness. A Healthcare Directive is significant because no family member wants the stress or guilt of making decisions regarding life or death. In Perry’s case, the family grieved peacefully as the directive guided them through the tough decision to end life support when it was appropriate.
Durable Power of Attorney – This document authorizes someone to handle matters such as finances and healthcare on your behalf. Without this, the Healthcare Directive could not be administered.
Revocable Trust – A Revocable Trust allows the grantor to alter or cancel the trust’s provisions during their lifetime. In other words, you retain control of your assets until you’re no longer able to do so. The trust assets normally transfer to the beneficiaries only after death, and they’re distributed as prescribed in the trust document.
In Perry’s case, his two children inherited a home in San Fernando Valley, California. With a Revocable Trust in place, Perry seamlessly transferred the family home to his children with favorable tax benefits. With about a $3,000 investment in estate planning, Perry saved the children thousands of dollars a year in property tax on his $2 million home.
If you already have an estate planner, well done. Ask them to help you review the Estate Planning Essentials as soon as possible. If not, please feel free to reach out to me, Edward Vela at www.empiriKalpartners.com. My number is 925-300-8805 or email to edward@empiriKalpartners.com. It is never too soon to start getting organized!
Eric Harding is the founder of empiriKal partners, llc ©. As a graduate of Hillsdale College, Eric established the firm as an independent Registered Investment Advisor (RIA) based on Hillsdale’s four pillars – Freedom, Learning, Faith, and Character.
While some investment advisors fixate primarily on market fundamentals, Eric’s team looks through a geopolitical lens, finding opportunities that others might miss.
Edward Vela is an Investment Advisor and the Estate Planning Specialist at empiriKal partners, llc ©. with 13 years of wealth management experience. He earned a Journalism certification from the University of Massachusetts as well as a BA in Political Science and a certification in Financial Planning at UCLA. In June of 2020, he graduated from the UCLA Anderson School of Management with an Executive MBA.