Covering All Bases for Timely Estate Planning

By David Chazin

Managing Partner/Financial Planner

For Chevron employees who have worked hard, saved and invested, a good estate preservation strategy can help ensure that your assets are protected and loved ones cared for in the future. One of the best reasons to preserve an estate is to honor what you’ve done. You don’t want everything you’ve worked for your life to have no value in the future.

Estate preservation strategies vary greatly. Each must address the unique financial situation of the individual for whom it was crafted. Admittedly, some estate issues are complex but it can be invaluable to have a formal roadmap to safeguarding your finances and possessions.

When should you develop an estate preservation strategy? There is no “right” age – but delay is unwise.
It’s best to start early but, unfortunately, few people do. For example, nearly 60 percent of Americans don't have a will, according to a 2008 survey by

Reasons for delay vary. Just like everyone else, Chevron employees lead hectic lives. Others are uncomfortable discussing death. Still many want to avoid dealing with complex financial and legal issues.

While these factors are understandable, they’re outweighed by the benefits of having a sound estate preservation strategy. These include reducing estate taxes, allowing for a timely resolution of your estate and ensuring assets are distributed and protected according to your wishes. In addition, a strategy guarantees that, if you’re unable to make them, financial and health care decisions reflect your desires.
While differing greatly between Chevron employees, estate strategies typically are developed using a similar process.

The first step is to find expert assistance. A good team of advisors – including your attorney, accountant and financial planner – is essential. Once a team is assembled, start setting goals. Answering two questions will help:

• How much money will you need for your lifetime? It’s most important when goal-setting to ensure you have enough to live on. This is known as the “necessary estate.” Without determining how much you will need for the rest of your life, and knowing that you are comfortable, you can’t move on to preparing an estate plan. Pinpointing your necessary estate and thus your “excess estate” – the money you won’t need – is more likely to lead to good decisions.
• Where do you want your assets to go? There are really only three places: heirs, charity or estate taxes. So, think carefully about the first two categories and, if this meets your objectives, do all possible to reduce the effect of the third.

After establishing goals, work with advisors to create a formal estate plan. This provides both a vision of the future and a path to get there. Estate plans can have many elements. However, almost all contain a few basics, such as:

• A will. This is the most basic and necessary of all estate documents. It determines where assets go.
• Health care power of attorney. This document spells out who will make health care decisions for you, if you cannot.
• Financial power of attorney. This identifies who will make financial decisions, if you cannot.
• A trust. Trusts come in many different forms. However, their chief function generally is to protect assets and reduce the size of your taxable estate. They also can avoid the delays and costs associated with probate. Trusts are not for the very rich alone but can serve the needs of a wide range of Chevron employees.

Once an estate plan is completed, be sure that all assets are titled so they reflect what’s in it. If they aren’t, the plan could be ineffective, confusing and counterproductive.

Remember that estate plans are not static. Tax laws are revised. Property is bought and sold. Marital and family statuses change. Objectives change. These events and others can affect a plan. So, monitoring is important. We recommend quarterly or semi-annual reviews.

Finally, leave a paper trail. Write a list that covers all your assets and liabilities. Put that in a safe place with all your important documents, especially those related to your estate plan. Make sure that people you trust know where the list and papers are.

We would be happy to sit down with you for a review of your estate planning and finding any areas that need to be tweaked. Because we work with many Chevron executives, managers, employees and retirees, we're very knowledgeable about your various compensation plans and benefit offerings, plus other issues specific to Chevron employees (in addition to the retirement, investment, and estate planning issues everybody faces). In fact, chances are you may know one of our Chevron clients and you can ask them how working with an advisor has helped them.

Please contact us at (925) 659-0217 with specific questions or to schedule a time to meet in our San Ramon, Point Richmond or Houston, TX offices. Also, follow us on LinkedIn.

David Chazin, Insight Wealth Strategies and Lincoln Financial Advisors Corp are not affiliated with Chevron.