Most people don’t spend too much time thinking about end-of-life planning on a daily basis, but doing so is part of a comprehensive financial planning process. To get you warmed up to the basics of estate planning, this article focuses on two basic tools you have available that make up the foundation of estate planning — a will and a living trust.

Basic Definitions
A will is a legal document that states what you want to happen to your assets and who will raise your minor children after you die. A living trust is an agreement you make with a trustee — who holds legal title to your property. It is created and goes into effect while you are still alive.


Wills and living trusts have some basic similarities:

  • Distribute property to beneficiaries. In both a will and a living trust, you can provide instructions on how to distribute your property upon your death to the beneficiaries you choose.
  • Can be revised. If you wish to make changes, wills and living trusts both can be revised any time prior to your death as long as you remain mentally sound.


A will:

  • Requires appointment of an executor. This person will be in charge — under court supervision — of executing your estate after you die, including resolving any claims from creditors, finalizing any legal matters, and distributing your remaining assets to beneficiaries.
  • Goes into effect only after you die. If you become disabled, physically or mentally, a guardianship may need to be established to manage your estate. Consult a qualified attorney for more information.
  • Allows the appointment of a guardian for minor children. In most states this is only possible with a will.
  • May require probate. Probate is a legal process, supervised by the court, where your will is validated, all of your debts are settled, and your remaining assets are distributed to your beneficiaries. The probate process may take several months to complete.
  • May be simpler to make. A will is generally easier to set up than a trust.

A living trust:

  • Takes effect immediately. As soon as you create and transfer your property into it, a living trust is in effect.
  • Requires transfer of property. Property is not transferred directly to your beneficiaries — it must first be transferred into the trust you have created. Typically, for personal property, you can do an assignment of your property to the trust. However, assets such as real estate, automobiles and non-tax-qualified financial accounts may need to be retitled into the name of the trust. You should also review your beneficiary designations for life insurance and tax-qualified accounts with your estate planning attorney. If you do not transfer assets into your trust during your lifetime, the assets may still go through probate court.
  • Avoids probate. If property is properly transferred to the trust during your lifetime, it will generally avoid probate upon death, which can often expedite the administration process.
  • Requires appointment of a trustee. This person is in charge of the assets held in the trust and distributes them after your death. The position is similar to an executor of a will. To maintain control of your property while you are still alive, you may serve as the initial trustee. You should name a successor trustee to carry out your wishes if you become disabled or die.
  • Maintains privacy after death. Since a will typically goes through probate, it becomes a public document. A living trust usually does not, and can be used to keep your affairs private.
  • Estate planning flexibility. Because a living trust does not require ongoing court oversight, a trust is often used in situations where an outright distribution of assets to the beneficiaries may not be desirable. This can be for a number of reasons, including age of beneficiary, poor financial management, or unstable personal issues.

Wills and trusts are both legal documents that your estate planning attorney will use to help you and your family achieve your estate planning goals. Wherever you are in the process of planning for your estate, it is best to educate yourself and stay informed. Tax and probate laws vary from state to state. You should always consult with a qualified estate planning attorney in your state.


Whether you currently invest in a Roth IRA or a traditional IRA, both are smart retirement saving and investing accounts that provide the potential for tax-deferred growth. As you may likely know, the main difference between the two types of accounts is how they are taxed.

Contributions to a traditional IRA are tax-deductible, meaning every dollar you contribute reduces your taxable income, up to the IRS annual limit. The money grows without being taxed until you start taking distributions in retirement. At that point, the money you withdraw is taxed as ordinary income. Roth IRAs are funded with after-tax dollars, so you can’t deduct your contributions. However, because you already paid taxes on the money when you put it into your account, you don’t have to pay taxes when you take the money out.

Some people who have a traditional IRA may want to consider converting it to a Roth IRA. Such a conversion could be an effective tool for reducing future tax liability — especially now. That’s because the tax reductions for individuals that came about with the Tax Cuts and Jobs Act of 2017 are set to expire at the end of 2025. Unless there is further congressional action as 2025 draws nearer, taxes will likely go back up in 2026. You will still be able to do a Roth conversion, but the taxes you pay when you move the money from a traditional IRA could be higher. In addition, the following are a couple of other situations where converting to a Roth IRA might be a good idea.

Anyone who feels they will be in a higher tax bracket in retirement.

One way this could happen is that when you reach age 72, the IRS requires you to start taking a percentage of your money out of retirement accounts, such as a traditional IRA, in which taxes were deferred. Those withdrawals, when added to your Social Security, pension and any other income you might have, could bump you into a higher tax bracket.

Anyone who wants to leave a tax-free legacy behind for their heirs.

Yes, you must pay the taxes on any amount moved from the traditional IRA to the Roth IRA. However, once the funds arrive safely in the Roth IRA, your savings can grow tax-free. Under the SECURE Act, any of your children or other heirs can defer any distributions from the inherited Roth IRA until year 10, allowing the money to continue tax-free growth potential that entire time. And your children/heirs won’t be taxed on the distributions when they do take them. Keep in mind: when converting traditional IRA money to a Roth IRA, you need to be aware of any potential upward bump to your marginal tax bracket for the current year. A financial planner or tax professional can help create a strategy for avoiding this.

While converting a traditional IRA to a Roth IRA might make good sense for many people, there are also reasons someone would likely not want to convert, including:

  • If you will be in a lower tax bracket in future years
  • If you don’t have enough cash or savings to pay the conversion tax
  • If you might need the money within five years or less
  • If your beneficiary will have a lower tax bracket than yours
  • If you plan to leave your IRA to a charity.

Traditional IRA owners should consider the tax ramifications, age and income restrictions in regards to executing a conversion from a Traditional IRA to a Roth IRA.

Financial Wellness: The Basics of Retirement Planning Sample Brochure

Recently, I talked with a couple of clients regarding their employer-provided disability insurance coverage. One of my goals for 2021 is to increase your awareness of its importance within your overall financial wellness plan. For example, while many of you have some level of group disability coverage through your employer, how closely have you studied the details? Do you know if it is enough coverage, given your own personal financial situation and potential needs?

I’d like to start a discussion about this with you during our annual client reviews this month. For now, here’s a quick “Disability Insurance 101” Q&A to get things started!

Why is disability insurance important?

Your ability to earn a living is your most important asset — although I bet you never thought about it this way. Disability insurance is one of the best ways to protect it. Think of it as insurance for your paycheck (just in case you’ve never seen one of those endless series of AFLAC ads featuring the quacking duck). Disability insurance provides you with a percentage of your income if an illness or injury prevents you from working and earning a living. You don’t hesitate to insure your home, car and phone, so why wouldn’t you also protect what pays for all those things—your paycheck.

Do I need disability insurance if I work?

Disability insurance is something anyone who works and has earnings should consider. In fact, according to the Social Security Administration, one in four people today will become disabled and potentially face financial hardship at some point during his or her working life. Disability insurance income helps cover expenses if you can’t work because of an illness or injury. There are disability insurance policies tailored to workers in specific professions as well as disability insurance for self-employed individuals.

What are the types of disability insurance?

There are two main types of disability insurance: short-term disability insurance and long-term disability insurance. Short-term disability insurance covers lost income for about three months while long-term disability insurance typically pays a portion of your lost income for anywhere from one year to your entire life.

How much disability insurance do I need?

You can calculate how much disability insurance you need by adding up your monthly expenses. Then add up how much disability insurance you already have as well as any personal savings you could draw on if you couldn’t work. If that number is less than your monthly expenses, you might consider buying more disability insurance. 

How do I get disability insurance?

The main ways to get disability insurance are through your employer, through a professional organization, or on your own. Buying disability insurance yourself, through an insurance company, is typically the most flexible and reliable way to get coverage.

How much does disability insurance cost?

The cost of disability insurance depends on several factors, including your benefit amount, benefit period, occupation, health status, age and terms of the policy. As a general rule of thumb, the disability insurance cost for a long term individual policy is 1% to 3% of your annual salary.

How should I manage my disability insurance policy?

It’s always a good idea to review your disability insurance with a financial planning professional or licensed insurance agent whenever you experience a life change. This can include accepting a new job, getting married, welcoming a baby, assuming new debt or receiving a substantial raise at your job. It’s also a good idea to review your disability insurance benefits once a year with a financial professional (or licensed agent) to make sure everything is in good shape.

How do I receive disability insurance benefits?

You can file a claim to receive disability benefits through your employer’s human resources department if your policy is through work or through your licensed insurance agent if you bought the policy on your own. To receive disability insurance benefits, you will have to meet the disability definition as it’s defined in your policy. There may also be a disability insurance elimination period, which is a waiting period that can last anywhere from a few weeks to a few months before you can receive benefits.

Feel free to visit the Council for Disability Awareness website for more information (

Additional sources: Social Security Administration; Council for Disability Awareness; Kmotion Research.