Estate planning vital to a comprehensive financial plan

PHOENIX — For Arizonans who are looking to have a comprehensive financial plan, it is essential that they have an estate plan in place. 

In fact, president and founder of Bright Wealth Management Matt Dages called estate planning the foundation of a comprehensive financial plan. 

“When we talk about estate planning, it’s something that we go through with every single household,” Dages said. “And it doesn’t necessarily just mean a trust or a will, but it is the estate plan planning itself and incorporating that financial plan into making sure that some of those basics are covered.”

Some of the basics that are often overlooked include beneficiaries being accurately titled on accounts, trusts being funded correctly and having a tax plan that ensures beneficiaries receive the most money possible. 

You need to be prepared for the unexpected

Dages emphasized that even if estate planning is the last thing on your mind, it’s important to do because you never know what could happen. 

“You don’t want to be in the position where the unexpected occurs and there’s a tragedy or … you’re not able to speak for yourself and your spouse isn’t equipped or (doesn’t) have the right legal documentation to handle things on your behalf,” Dages said. “So we want to make sure that every family, every household has a very clear estate plan.” 

It is also essential that everything pertaining to the financial plan is organized and easily accessible. That way, your family can pull a binder off a shelf, call one number and everything is there, including the estate plan. 

“Transparency is great in making sure that you are including family members … and just allowing them to know, ‘Hey, this is where the money is at. This is where we hold our retirement at,’” Dages said. “You don’t need to necessarily divulge the details on what you have and what you don’t have financially, but we want to know this is where it’s at.” 

Estate planning is especially important for mixed families

Dages explained that Bright Wealth Management works with a lot of mixed households where people got remarried later in life and each spouse brought in their own kids or grandkids. 

For those families, it is especially important to have a legal structure in place and not just rely on good intentions. 

“I always recommend that in that case where you have multiple beneficiaries, especially different biological parents, that we want to have a trust that provides for a surviving spouse during their lifetime or for their children thereafter,” Dages said. 

Dages added that he has had plenty of instances where clients come in and retirement accounts aren’t updated so the statements have the previous spouse listed as the beneficiary. By law, the account then bypasses the will or trust, regardless of what they say, and goes to the ex-spouse. 

“So again, estate planning is not just about having the trust or having the will. We want to make sure that we build the financial plan around that estate plan,” Dages said. “(The) financial plan and the estate plan and the tax plan have to work in synchrony together.”

The Bright Wealth Management Show with Matt Dages airs Saturdays from 1 p.m. to 2 p.m. and Sundays from 3 p.m. to 4 p.m. on KTAR News 92.3 FM.