college planning

What Is Estate Planning?

What is Estate Planning.jpg

Do you have a great aunt promising to leave you her prized collection of commemorative porcelain plates when she passes? When people think about estate planning, things like that are typically not what first comes to mind. Instead, estate planning is largely viewed as a service reserved for the extraordinarily wealthy, those who have properties almost as extensive as their bank accounts. But that is not the case at all! If you own a home or have an investment account, no matter how small, you technically have an estate. If you own just about anything and you want to be sure it goes to a specific person or charity, estate planning is typically the way to do so.


How Estate Planning Works

In the most simplified sense, estate planning is the process of preparing for what you want to do with all of your assets after you pass away. In some instances, there are already legal measures in place to dictate who will inherit your assets. For example, if you and your spouse both own your home, your house is pretty much guaranteed to remain in your spouse’s ownership. Or, if you have designated a beneficiary on your life insurance policy, that is another area in which there is not much question about legal ownership. Estate planning takes those sorts of things into account, includes all of your other assets, and helps you create a comprehensive plan. Estate planning allows you to dictate who will inherit, what they will inherit, and when they will receive their inheritance. Even better, it helps you do so in such a way that legal fees, taxes, and other expenses are accounted for and minimized.


So, Why Estate Planning?

Largely, when people think about estate planning, it is done in terms of investments and financial questions. However, it extends far beyond that. A majority of estate planning measures are there to help determine what will happen to your savings and investments after you pass away. Beyond that, it is also a way to help prepare for things that may or may not come to pass. For example, estate planning can create legal documents that will dictate who will get custody of your children if you and your spouse pass away while they are minors. Beyond that, estate planning is a way to provide for your kids financially while they are still minors, and to create accounts that they can inherit once they reach a certain age.

Some of the common concerns with estate planning include:

  • Provisions for minor children — finances, guardianship, inheritance
  • Plans for what to do if you become disabled — care plans, financial control, and who can make medical decisions on your behalf
  • Allocations for the care of a special needs dependent — care plans, finances for care, guardianship
  • Directives about your assets — to exclude or provide legal stipulations for anyone who might inherit
  • Protect your family in regards to loss of your income — through life insurance, disability income insurance, and other measures

Ultimately, the goal is to provide for those you care about. Estate planning gives you the financial and legal means to do so, and it helps to make sure that all aspects of your loved ones’ lives are attended to (as much as possible). As you can probably surmise, estate planning is not restricted to those of retirement age; it is for anyone with assets to protect and loved ones to care for.

Crafting A Plan

Estate planning can (and should) be a major piece of your overall financial plan. Not only does estate planning help you determine what will happen to your assets when you pass away, it can also help guide your investment strategy, life insurance needs, and so on, thus affecting your overarching financial plan. Changes to your financial situation will often mean your financial plan requires commensurate changes. As you likely imagine, the same concept applies to estate planning. As your kids reach adulthood or other life changes occur, your finances and your estate planning needs will also change. Estate planning, investments, and life changes can all have a major impact on your overall financial plan. Be sure you are working with a fiduciary financial planner for estate planning. This will help ensure your estate plan aligns well with your overall financial plan.

Are you ready to learn more? Contact Anchor Wealth Management for fiduciary financial planning, investments, and estate planning in Lanark and Rockford.

How Does JTWROS Work?


Do you know what will happen to your assets when you pass away? One of the concerns most frequently discussed with a financial planner is how to ensure your spouse and children will not experience financial hardship if you were to pass away unexpectedly. Savings and investments will not do your family much help if all that money is caught up in legal proceedings for months or years after you or your spouse pass away. Thorough estate planning can help limit how much time your assets spend in probate. One such option worth setting up is a Joint Tenants with Right of Survivorship (JTWROS) account.



When someone passes away, their assets and property (including a brokerage account)  typically go through probate, which is the legal process of wrapping up a deceased person’s estate. Probate often takes many months or even years to complete. Joint Tenants with Right of Survivorship (JTWROS) is a type of brokerage account which specifically avoids probate. With JTWROS, when one owner passes away, the account is already the property of the surviving owner and therefore avoids probate. Both (or all) owners of the account have equal rights to the account’s assets, which means any owner can make investment transactions. JTWROS accounts can be owned by more than two people, but because all assets are owned equally, this type of brokerage account is most commonly shared between spouses. The biggest benefit of JTWROS accounts is that the right of survivorship is set up when the account is initiated, which means the account will not need to go through probate and is accessible to the surviving owner without waiting.


Setting Up JTWROS

In order to create a JTWROS account, all owners have to meet the following four qualifiers:

  • All co-owners have to acquire the assets at the same time (i.e. all owners have to be added when the account is created).
  • Co-owners must have the same title on the assets.
  • All owners have to have an equal share in assets — no matter how much each person pays into the account.
  • All owners have to have the same right to own/possess all assets.

As long as all of those qualifiers are met, a JTWROS account can be created. Of course, it’s important to work with your financial advisor to ensure the wording of the document specifies the right of survivorship. There are other joint tenancy options, and if right of survivorship isn’t specified — or if one of the above qualifications is not met — the account will default to a less-restrictive form of ownership.


Protect Your Assets

If you are looking for ways to protect your assets and avoid probate, a JTWROS account can be a great way to ensure your spouse and family have access to at least some of your assets immediately in the event of your death. For more information on JTWROS accounts and other investments, let the Anchor Wealth Management team help. Contact us in Lanark and Rockford today.