Sandy Spring Financial News - January 2008

This issue of Sandy Spring Financial News contains the first of three articles that address the core elements of Transition Planning.  In this issue, and the two that follow, I will discuss a total of nine important steps necessary to prepare for the major changes in our lives – retirement, illness and death.

When hired to assist with Transition Planning, I begin the process with the same nine core elements being shared with you.  I have created a checklist of more than 100 questions that work in concert with the nine core elements to identify items that require attention.  I then work with my clients to address those items.

Working with the client, and with the decision makers named in the client’s legal documents (Personal Representatives, Trustees and Agents under Financial and Medical Powers of Attorney), their attorney and accountant, a 6 to 12 month process of putting the pieces of the Transition Plan together is begun.  Once the plan is in place, it then becomes a matter of ongoing review, adjustment and modification as assets, tax laws and family dynamics change over time.  Finally, when illness or death does occur, my role is to help the decision makers named in the documents accomplish their objectives with the help of attorneys, accountants and care managers.  If my client has chosen to use our Trust Division as a corporate trustee, I will help coordinate their role with one of our Trust Officers.

During the next year, I will expand on each of the core elements.  The ultimate goal is to carry out the wishes of the client pertaining to financial and medical affairs during illness, and meet the estate planning objectives upon death and beyond – and help to pay the least amount of taxes as possible.

The first three of the nine core elements of Transition Planning:

1.  Legal Documents:  Having appropriate and updated legal documents is a basic requirement of all estate plans.  I am fortunate to work with a large group of estate planning attorneys who assist my clients in this critical area.  Many individuals do not have the appropriate estate planning documents in place or the documents are out of date.  Without proper and current documents, an estate plan is very likely to fail to achieve its goals.

2.  Fiduciaries:  Individuals or corporations (such as Sandy Spring Bank) named in legal documents to carry out the wishes of the client are known as fiduciaries.  The responsibilities of a fiduciary may include managing the client’s financial and medical affairs during illness, settling the client’s estate upon death and managing any continuing trusts after death.  The responsibilities of the fiduciary, or fiduciaries, are numerous and the amount of work necessary to satisfy the role is usually significant.  In all, asking someone to be a fiduciary is quite an assignment.  One of my primary roles is to prepare and support these individuals.  If the Bank is named, then my role is to build a working file to help prepare the Bank for its future role.

3.  Preparation of Fiduciaries:  Section two leads us to this core element.  Many clients name an individual or a Bank as a future Personal Representative, Trustee or Agent under a Financial and Medical Power of Attorney, and fail to adequately prepare this individual or entity.  Preparation of the fiduciaries is a key factor in how smoothly things run from that point on.  This is where things break down:  “Where did Mom keep her legal documents?”  “Did she have a Will – or is this the most recent version?”  “Where are her assets?”  “What valuables are in her home?”  “What do we do with her home, her beach house, her jewelry?”  The list of things a decision maker needs to know is very long but with good proactive planning, we can prepare the future Fiduciary for their very important role.

Next month I will discuss investments, taxes and insurance which are the next three core elements of Transition Planning.  Please forward this information to anyone who might benefit from it.  As always, please feel free to call me at 301 785-4112 if I can help you in any way.

The material herein represents the opinions of the author and should not be construed to represent the opinions, recommendations or official actions of Sandy Spring Bank.

Trust Services provided by Sandy Spring Bank

*Not FDIC Insured *No Bank Guarantee *Not a Bank Deposit *Not Insured by Any Government Agency *May Lose Value

Securities and insurance products are offered by, and Financial Advisors and Consultants are registered with, Linsco/Private Ledger (LPL) and its affiliates, member NASD/SIPC.  Sandy Spring Investment Services is not a broker/dealer and is not affiliated with LPL.