Filling the Various Estate Planning Roles

Filling the Various Estate Planning Roles


At Merriman, we partner with our clients to ensure no stone goes unturned with respect to their complete Wealth Management plan. One of the more complicated issues clients face is crafting and updating their estate plans.

This is not surprising as estate planning preparation and upkeep come with difficult questions—both qualitative and quantitative. The burden of these questions can often drive folks to put off the discussion and leave their plan vulnerable. The purpose of this brief post is to let you know that it does not have to be so difficult.

This article serves as a starting point to initiate the estate planning discussion. It is a discussion of the various estate planning roles you need to fulfill. Like most things, having a process and a plan will lead to peace of mind and planned success.

Let’s start with the various roles that need to be filled:

  • Guardian
  • Trustee
  • Financial Power of Attorney (POA)
  • Medical POA
  • Executor/Personal Representative.

One commonality for all these roles is proximity. If you can find someone close, that is a prudent solution. For example, in selecting a guardian for your children, it is best they are local to avoid changing schools, establishing new friends, etc. Similarly, if there is property to sell in your estate, it is best to have a local executor, as opposed to having someone across the country who is unfamiliar with the local scene and would have to travel extensively to manage the estate.

A Guardian is someone who looks after and is legally responsible for your children until they are adults. This person should embody all the traits you would want in someone who will take care of your kids in the event you are no longer around. Often, this is a family member with close proximity (as outlined above). Keeping your kids in their current environment is so important, especially when they are already trying to deal with your absence.

A Trustee is the person who has control or powers of administration over the trust assets in your estate. The trust assets do NOT belong to the Trustee. Rather, the Trustee is safeguarding the assets per the terms of the trust and for the trust benefactors.

The role of Executor “triggers” if one or both spouses pass away. This person’s job is to fulfill all of the requests and wishes as outlined in your will. This person should have high financial competence and a good understanding of what you own and how you want your assets distributed. Technically, they will follow the wishes as outlined in your estate plan. However, we advise clients to draft a less formal letter of instruction to confirm your wishes are carried out as precisely as possible.

The next two items are in effect during your lifetime. A Financial POA grants that person the ability to make financial decisions on your behalf if/when you no longer have the ability to do so of your own accord. A Medical POA functions the same but is related to medical decisions. Both of these roles should be set up with your initial estate plan.

If you have already crafted your estate plan, take a few minutes to consider who is currently filling these roles. Are they still the right person for the job? If not, who is better suited? If changes are required, let your estate planning attorney know and get to work on updating your documents. If you have yet to complete your estate plan, consider who would best serve in the aforementioned roles. If you already have an estate planning attorney, get to work on crafting your plan. If not, let us know, and we can connect you with one.

Another tool you can use to begin to formulate your plan is our “After Death Occurs” checklist. While this outlines a post-mortem list, it also serves as a great tool to get you thinking about the roles described above.

At Merriman, our goal is to ensure clients’ plans are buttoned up from top to bottom. While we emphasize financial planning and investment portfolio management, we also partner with our clients to ensure they are covered in the areas of estate planning, taxes, and insurance. Ensuring your estate plan is taken care of will provide peace of mind on your journey to Investing Wisely to Live Fully.

For additional reading on this topic, check out our ebook The Transparent Legacy for advice on conversations you must have with your loved ones before it’s too late.



Disclosure: The material is presented solely for information purposes and has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Merriman does not provide tax, legal or accounting advice, and nothing contained in these materials should be relied upon as such. Advisory services are only offered to clients or prospective clients where Merriman and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Merriman unless a client service agreement is in place.”


Investing in Coral Reefs

Investing in Coral Reefs

Maui was always a favorite vacation spot of mine growing up. One of the best parts was my aunt and uncle’s snorkel business. We would wake up early for the calm water, quickly eat a pineapple donut for breakfast, and set sail. Having been in business for decades, they knew the island well. Whatever you were looking for (or not looking for, like sharks), they could find it.

Thirty years later, I am now taking my family to Hawaii. While we still enjoy the water and all it has to offer, things have changed, most notably the coral reefs and the ecosystems they support. (more…)

Cyber Hygiene

Cyber Hygiene

This post was co-authored by Wealth Advisor Lowell Parker, CFP® and Information Systems Manager Rodney Gonzales.

As banks become increasingly difficult for cybercriminals to hack, high net-worth families are the next logical targets. These criminals are organized, patient, and in some cases, well-funded. Cybercrime is also underreported, and while the court system is catching up with the expansion of laws and penalties for cyber-related crimes, cases remain hard to solve or even prove.

Having your personal information compromised isn’t a matter of “if,” but “when.” It’s less expensive to take preventative measures than it is to investigate and eliminate threats. It’s imperative that you take the right precautions both externally, with your vendors and service providers, as well as internally with your home computers and networked systems. (more…)

Driving Returns Through Strategic Asset Location

Physicians with at least one retirement account (for example, an IRA, Roth IRA or 401k) and one taxable account will benefit from higher returns with comprehensive asset location. In asset location, all accounts supporting the same financial objectives (for example, providing income in retirement) are viewed collectively as a single portfolio. Asset classes (for example, U.S. stocks or government bonds) are preferentially placed in either retirement or taxable accounts.

In taxable accounts, high-yielding assets have a higher tax burden than in retirement accounts. These assets are prioritized for placement in retirement accounts. In contrast, tax-free municipal bonds bear no tax burden, so they are preferentially placed in a taxable account. The result is the risk-adjusted expected return from the sum of all accounts increases. This is particularly important for physicians who, by virtue of being in high tax brackets, pay a lot of taxes.

Consider what happens if you place a high-yielding investment in a non-tax sheltered account. You must pay 39.6% (top tax rate) on non-qualified distributions from that investment, as opposed to sheltering that high-yielding asset in a tax-deferred account. Clearly, your net returns are dependent upon more than just appreciation. Smart asset location matters, especially for high income earning physicians.

Think of it like a hospital – a complex entity separated into different wings and departments to maximize efficiency. Each department houses doctors and staff who are best equipped for their roles. Emergency room doctors are going to be dealing with people needing the most immediate and intense level of care. An ER doctor wouldn’t treat a patient with a sprained finger while someone who was just in a traumatic car accident sits in the waiting room. In much the same way, your aggregate investment portfolio can be separated into different accounts and investment vehicles. Inside each of those vehicles are investments and holdings that are suited for the particular account type.

A more efficient hospital will lead to greater outcomes and profitability. The same is true for your portfolio. Strategic asset location maximizes efficiency and leads to better outcomes and portfolio growth.

Living Fully: Juan Aragon

Dr. Juan AragonLast fall I had the pleasure of interviewing Dr. Juan Aragon, Executive Director of Primary Care, Specialties and Physicians’ Services at Evergreen Health.

His story begins in Costa Rica where he grew up and completed his medical training. His journey into medicine was sparked on a casual car ride with his father who asked Juan the question: “what are you going to do for a living?” When Juan told him that he wanted to be a missionary, his father pressed back, asking how he would pay the bills. Right then and there, Juan decided he would go into medicine.

After starting a medical training program in Costa Rica, Juan took 9 months off for bible school at Capernwray Hall in England. His goal was to mature, away from his family, and spend some time in self-reflection to ensure that medical school was truly the right path for him.

Juan finished medical school at age 24 and took a job in the remote location of Drakes Bay on the Oso Peninsula in Costa Rica. Juan was the second doctor Drakes Bay ever had and, needless to say, he gained a ton of clinical experience there.

Missionary work continued to call to him, so he left Drakes Bay to work for a bible school, and did pro-bono work for the affiliated hospital. This is where he learned the administrative side of medicine. And, how much he liked it. He wore a lot of hats: Chief of Human Resources, Chief Risk Officer, etc., and by the time he moved on, the school had built up an unprecedented $300,000 cash reserve.

In 2008 he received his Master of Medical Management, Health Systems Management from Tulane University. He moved to Seattle in 2009 to start his career at Evergreen Health.

After learning about his background, I asked Dr. Aragon a series of questions, as follows:

Lowell: How do you give back?

Juan: My religion – Christianity – should have a visible impact. It is not just a philosophy. Early on I gave back with my talents and skills via board participation. I focused on organizations that had youth programs, like the YMCA, with the goal of helping kids navigate the messy teen years. I have continued to work with the YMCA in tandem with Evergreen.

I am currently involved with the University of Washington Masters in Health Administration program. I see these kids as the ones who will be here when I am not. Investing in their future is paramount. My participation in panels and business cases also helps me learn and succeed in my current role at Evergreen Health.

Lowell: How do you “Live Fully”?

Juan: At the end of the day when you look back at a day’s worth, a year’s worth or even 10 years’ worth of time, you need to ask: did I invest enough time in my family that I am preparing them to be better individuals to face the challenges of this world than I am? Am I fully investing in the people I love the most? Was I conscious enough to be grateful to the people who contributed to my life, in recognition that I am where I am because of them? Answering “yes” to these question brings fullness. A friend once told me – “be grateful with your treasures, be grateful with your talents and be grateful with your touch.”

Lowell: What is the best piece of financial advice you ever received?

Juan: Live like it’s your last day but plan like you are going to live a hundred years. Don’t get into credit card debt. Save enough money to have fun.  Always have the attitude that if you are willing to give, opportunities will present themselves constantly. Look at things as opportunities. The same thing is true with investing: Don’t leave it all in one place. Leave it where you can take advantage of opportunities.

Lowell: Do you miss practicing medicine?

Juan: Yes. But, I made the choice in 2008 to pursue an administrative career. I find alternative ways to be with people, and I see the long term impact that my work will have on patients. I know that at some point, I or my loved ones will need these services and I want to make sure they are the best services possible.

Lowell: What is the biggest challenge and opportunity for health care?

Juan: Challenge – Affordability. Our health care is so expensive that it is not sustainable. For the past 6 years, we have tried 200 experiments and none have delivered results. Opportunity – Same thing. If you think about how our nation was formed, it has always figured out how to force its way through complex problems. The US is the way it is because it figures out innovative solutions to transform the market. We will break through. Consider the innovations of Amazon, Google and Apple for instance.

Lowell: What advice do you have for physicians?

Juan: As you are figuring out what you want to do with your life, take the time to figure out what you are passionate about. Make sure you have the skills and financial support to do it. Figure out your priorities and have a plan to make sure those priorities are met. As long as you have a plan, you know where you are going. You can figure it out. Ask for help. Design the map to fit your lifestyle. Develop a plan to make enough money and enjoy it. Have a plan and understand choices and tradeoffs. Understand where true north is. Figure out how to overcome obstacles and stay on track.

Society presses kids to have it all figured out; this pressure is incredible. You do not have to have it all figured out. Have a plan. Talk to smart people. Work hard. Have a good attitude. Don’t think that when you go to college you need to have your retirement date figured out. It’s okay to not know all the answers. Never be afraid to ask for help.

Juan is an impressive person, and I thoroughly enjoyed speaking with him. His global perspective, work ethic, and humble attitude bring a unique perspective to the medical field. I hope you glean some insight from his thoughts, and that they lead you to a fuller place.