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Transcript June 23, 2015 ‐ Fidelity Viewpoints Webcast
eReview# 729108.1.0
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Andrew Hamil: Our goal for today is to provide everyone with timely information that may help you better protect the assets that
you’ve worked so hard to earn. For the first 30 minutes or so, we’re going to turn it over to Mark Albertson, who is
an estate planning specialist here at Fidelity. And Mark’s going to discuss strategies for building, maintaining, and
updating your estate plan. When Mark’s done, we’re going to turn it over to Matt George from Fidelity Center for
Applied Technology. Matt’s going to discuss the importance of ensuring that your key stakeholders are involved in
your planning process and have access to your most important documents. And Matt’s going to do that by walking
us through a demonstration of FidSafe®. Now, for those of you that aren’t familiar with FidSafe®, it’s a service of
Fidelity Labs, and provides a safe, easy, and no‐cost way to store, organize, and access digital copies of your
important documents. When Matt finishes up, that’s when we’ll open it up for Q&A.
All right. Now, before we begin, let me give you a little background on our speakers today. First up will be Mark
Albertson. Mark is a regional estate planning specialist with Fidelity Investments’ Wealth Planning and Personal
Trust group. He provides guidance and education to high net worth clients in the areas of estate, tax, and trust
planning, charitable giving, and wealth management, with a focus on efficient wealth and asset protection. Matt
George is a senior product manager with Fidelity Center for Applied Technology, also known as FCAT, which serves
as an innovation catalyst for new ideas and a focal point for technology leadership across Fidelity’s global
organizations. As a senior product manager, Matt is responsible for representing the voice of the customer and for
setting the vision for new products. Matt is currently working on FidSafe®.
All right, so enough from me. Let me turn it over to Mark Albertson. Mark, why don’t you get us started?
Mark Albertson: Thanks so much, Andy. It’s great to be here with you all, and for the next half‐hour, I’m honored to have the
opportunity to teach you just a little bit about estate planning.
Before we begin, I want to show you a slide that says “Wealth Planning Overview.” And this is a really important
diagram ‐‐ a summary, if you will, of the common investment themes and the financial topics that every investor
should consider when planning for their and their family’s future. And so consequently, if you take a look at that
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slide, you’ll see that there are essentially five columns. The fourth column is called Asset Protection Column, and
that’s the column that we’re going to be talking about today, which includes estate planning, wills, trusts, wealth
transfer, and charitable giving. We’ve structured this workshop to address many of the questions that we hear
most often with regard to estate planning. And we’ve got a lot to cover, so let’s begin by providing you with just
an overview of our agenda for today. We’re going to begin by answering the basic question, “Does everyone need
an estate plan?”, and we’ll look at some key considerations and benefits of estate planning, like what is considered
an estate asset; we’re going to review categories of assets that generally comprise a gross estate for estate tax
purposes. We’re then going to take a look at the basic foundational estate planning documents that most people
should consider putting into place. We then enter the more complicated territory with a discussion of revocable
trust and how the revocable trust and the foundational documents work together. Finally, we’ll close our webinar
taking a few quick and easy steps to create or refresh an estate plan.
Before we begin, I have the inevitable disclosure to read to you, so bear with me, and then we’ll start the seminar.
The tax and estate planning information presented today herein is general in nature, is provided for informational
purposes only, and should not be considered ‐‐ construed as legal or tax advice. Fidelity does not provide legal or
tax advice. Fidelity cannot guarantee that such information is accurate, complete, or timely. Laws of a particular
state or laws which may be applicable to a particular situation may have an impact on the applicability, accuracy,
or completeness of such information. Federal and state laws and regulations are complex and are subject to
change. Changes in such laws and regulations may have a material impact on pre‐ and/or after‐tax investment
results. Fidelity makes no warranties with regard to such information or results obtained by its use. Fidelity
disclaims any liability arising out of your use of or any tax position taken in reliance on such information. Always
consult an attorney or tax professional regarding your specific legal or tax situation.
Let’s talk about estate planning. Well, the first question may seem like a trick question, but it is, “Does everyone
need an estate plan?” I think sometimes people think that estate planning is something for very wealthy people,
people with large estates that have very complex planning needs, but the truth is that if you’re married, you may
want an estate plan to support your spouse financially, your children, your grandchildren. If you’re single, you
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might want to have an estate plan to provide for the support of your family members or others. If you’re
remarried and now have stepchildren, you may want an estate plan to provide for the financial support of your
new spouse and your children and maybe your spouse’s children. If you’re expecting an inheritance, you might
want an estate plan to ensure that the inheritance is distributed in accordance with your wishes, and if you’re
charitably inclined, you may want an estate plan to coordinate the terms of your gift or the charity or charities. If
you’re a business owner, you may want an estate plan to coordinate the sale or continuation of your business or
others. In large part, estate planning really is for anyone who wants to properly plan for the distribution of their
estate.
I know a lot of people wake up in the morning and the first thing that they think of is not estate planning. It’s not
one of those things that people look forward to doing. But there are some very important benefits to estate
planning that I think it’s worth talking about for just a moment. So given the fact that you’re here, I think we can
safely assume that you’re considering your own need for an estate plan or updating your existing plan, so I’m not
going to belabor this point. But regardless of how much money you have, almost everyone needs an estate plan. I
understand that death is a very uncomfortable topic for many people, but it’s a necessary topic, because it’s the
one fate that we all have in common. Well, now that I’ve got your attention, let’s just emphasize for a minute the
potential benefits of estate planning, which are listed here. Your estate plan is ‐‐ it’s as unusual and individual as
you are. And different needs and issues arise depending on your own personal and financial situation, but in all
cases, an estate plan should help in two major things: that is to preserve the assets you have accumulated and to
control the distribution of your estate. In reality, estate planning is really about those two things. The bottom line
is that an estate plan can help you protect your family’s privacy, it can help manage your assets, and it helps
ensure that your heir’s immediate and their future needs are taken care of. So consequently, estate planning is
not necessarily anything that’s fancy or complicated. It only needs to be as complicated as it needs to be in order
to accomplish your goals. So let’s take a quick look at the steps that you might want to consider in order to begin
the estate planning process.
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The next slide is entitled, “How are your assets distributed?” And I think this is a very, very important slide for you
to pay attention to, because I think in the first place, a lot of people don’t realize that there are a lot of ways that
your assets could possibly be transferred after you pass away. And there are a lot of pros and cons to using each
of these four areas. So I want to go over these in a little bit more detail, because this is a very important part of
estate planning.
Assets can be distributed in many different ways when someone passes away. And today, due to time limits, we’re
going to limit our discussion to the four most common ways of distribution. And these are by contract, by trust, by
law, and by probate. Your tax advisor or your attorney can explain whether there are other choices available to
you in light of your own particular situation, but these are the four major ways that property passes.
The first way is actually a very common way to pass assets, and that’s by contract. Any time you have a financial
account, you sign a contract with that financial institution that says you’re going to do some things and the
financial institution is going to do some things. And very often, a part of that contract is naming beneficiaries on
those assets. And this can include beneficiaries that are designated on an account or something called “transfer on
death registrations” on other accounts. Assets that are IRAs, 401(k)s, life insurance, and annuities are probably the
most common ways to pass assets by designated beneficiary, and so they fall into this category too. It’s really
important to realize that you need to keep your beneficiary designations up to date, because beneficiaries trump
everything else. If you have named a beneficiary, when you pass away, those assets are going to pass to that
beneficiary. In a way, every single beneficiary designation is just a little bit like a little mini‐estate plan, because
those assets will pass to those beneficiaries. And it’s important to keep them up to date, because we all know that
births, deaths, marriages, and divorces are all major life events that very often trigger necessary beneficiary
changes. So keep in mind that you can name a trust, you can name a qualified charity as a beneficiary, and you can
also name the people in your lives as beneficiaries. The great thing about beneficiaries is those assets go directly
to that beneficiary, and the administration of those assets can be very simple.
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The second way shown is by trust. Assets that are held in trust are distributed according to the terms of the trust
document, so in a way, a trust is a little bit like a private contract with a trustee. So in essence, the trust outlines
the provisions under which you want to pass those assets to the trust beneficiaries. And we’ll talk about those in a
little bit more detail when we talk about living trusts later in the presentation, but keep in mind that the nice thing
about trusts is that you can pass assets simply to beneficiaries using a trust instrument.
A third way to pass assets is something called “by law.” And these are assets that simply pass by virtue of the
asset, and probably the most common way of passing assets by law is something called “joint tenants with right of
survivorship,” or “tenants by the entirety.” And in essence, any joint account, all of the joint owners of that
account, all of the joint tenants on that account, own 100% of that asset. And so when one person dies, the
remaining joint tenants still own 100%, and consequently it passes very easily to the joint tenant.
And of course, assets can be distributed according to your will. And I think a lot of people don’t realize that if you
have a will, and the will controls any assets, then those assets are potentially going to pass through probate, which
is the fourth way of passing assets. Sometimes people think if you have a will there won’t be a probate,
sometimes, and they think that there will only be a probate if you don’t have a will, but that’s not true. If you have
a will and your will controls your assets, your assets will pass by probate. And essentially, probate is just simply the
court process of transferring title of your assets to your heirs. So somehow your name has to go off title and your
heirs’ names need to go on, and consequently, probate is the process for making sure that that happens. Now,
keep in mind that probate is a creature of state statute. So how simple or complex a probate is is going to depend
on a lot of factors. One major factor is going to be your state’s laws. In addition, keep in mind that if you don’t
have a will, any assets that aren’t passed to your heirs in other ways are going to be passed according to your
state’s intestacy laws. So in other words, states have laws that say if you haven’t had a will and assets don’t pass
by contract, by trust, or by law, then the state law will dictate who receives those assets. That may or may not be
who you want them to pass to, but you won’t have any choice in the matter because you haven’t done a will. And
also keep in mind that these laws vary greatly from state to state, and they may or may not permit your assets to
be distributed in accordance with how you would have wanted to have them distributed. And so consequently, it’s
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very important ‐‐ if we go back to the definition of estate planning, it’s about control and preservation, and so
consequently, a will helps you to control the distribution of those assets.
Now let’s talk for a moment about the key estate planning documents that are the essential building blocks of an
estate plan. And I think there are three really important documents that are part of an effective estate plan. The
will may be one of the most important estate planning tools, and you want to make sure you have a valid and
updated will, because it documents your wishes, and will be used to determine the distribution of the assets held
in your name when you pass away. It can be used to provide for the payment of the costs incurred in settling your
estate, and also designates the guardian of your minor children and your executor or personal representative, the
one who will administrate your estate after you pass away. Consequently, if you care about those things, a will is a
very important document. As I said before, if you don’t have a will, then the state you live in, rather than you, is
going to govern the disposition of those assets, and this is known as dying intestate. So whether you have a will or
not, the distribution of your estate assets will generally be subject to a legal process, and that’s known as probate.
When somebody dies intestate, their assets could very well be tied up in a very costly delay and public display of
probate court. And without a clear estate plan, you may unintentionally trigger legal challenges among family
members, since it might be unclear how you really intended your assets to be passed on. So remember, we just
saw a few slides ago that some assets, such as retirement savings and your taxable mutual funds and brokerage
accounts, may be distributed outside of your will, which will save your beneficiaries both time and money. Also
keep in mind that the instructions in a will are generally superseded by beneficiary designations or jointly held
assets. As I say, they typically trump a will ‐‐ that’s why it’s very critical for you to keep your beneficiary
designations up to date, so you don’t mistakenly leave certain assets to, oh, say, an ex‐spouse, for example.
Another important tool, and one that I consider to be probably one of the most important estate planning tools for
you, is something called a durable power of attorney, or a DPOA. This instrument helps you prepare for the
unexpected. I think a lot of people think of estate planning as death planning, but the truth is that estate planning
also encompasses incapacity planning. Your will provides for key decisions at your death, but what if you should
become incapacitated during your life? With a durable power of attorney, another individual has the ability to
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step in and to manage your financial affairs in accordance with the terms of the power of attorney at the time of
your illness or other incapacitation. A non‐durable power of attorney is generally used for limited circumstances in
order to allow somebody to conduct a single transaction on your behalf. The durable part of the durable power of
attorney says it endures through your incapacity; consequently, it’s a very important document, because without a
durable power of attorney, if you have title to assets and you own them individually and you become
incapacitated, it’s difficult for anyone to manage those assets for you. A DPOA typically authorizes somebody to
act on your behalf with regard to financial affairs, and very often one spouse appoints the other spouse as an
agent if you’re married. And if you decided to set up a durable power of attorney, there’s several considerations
to keep in mind. Any competent adult can serve as your agent; the durable power of attorney can be general or it
can be limited; and it can apply only to particular assets or particular accounts. It can take effect immediately or at
the time of your incapacitation. And although a power of attorney is often exercised if one spouse becomes sick or
unable to act on his or her own behalf, it can also be exercised under other circumstances. So consequently, it’s
very important for you to think about who’s going to be making those decisions on your behalf. A healthcare
proxy, which some states call a durable power of attorney for healthcare, authorizes somebody to act on your
behalf in healthcare situations. Consequently, it can be a very important document if you aren’t able to make your
own healthcare decisions so that you can nominate an agent to take care of those healthcare matters on your
own. Unlike a durable power of attorney, before somebody can act as your healthcare proxy, you have to become
incapacitated, and you can’t be able to make your own decisions on your own. So a healthcare proxy can always
be amended, or it can be revoked, but you still want to take great care in specifying what decisions your healthcare
proxy agent can and can’t make on your behalf.
You might also want to consider drafting a living will or a healthcare directive. This document typically expresses
your wishes to your agent and to your doctors when considering the use of life‐sustaining procedures. So again, a
living will is subject to state law considerations. In fact, in some states, such a document isn’t even enforceable.
So be sure to speak with your attorney regarding your own specific situation.
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As I mentioned earlier, one key estate planning component can very well be something called the revocable trust,
or sometimes it’s called the revocable living trust. Once you have your will in place, your tax advisor or your
attorney might suggest that you establish one or even more revocable trusts. And very simply, a revocable trust is
a legal instrument that functions much like your will. It generally allows you to control how your assets are
distributed or managed for your benefit or your heirs upon your death. And the primary difference between a will
and a trust is that, assuming your assets are transferred to the trust during your lifetime, those assets should
escape probate. If you haven’t transferred an asset to a trust, then the trust doesn’t control it, and so
consequently your will would establish that, and very often that means a probate. So a will alone is a one‐way
ticket to a probate. Once you’re in the probate, it’s the probate court and the probate court rules that determine
how long the probate process takes.
So within the provisions of the trust, a lot of objectives can be satisfied. It can provide for you, it can provide for
others during your lifetime as well as after your death, and it can make transferring assets to charities more
efficient and more effective. And perhaps the most compelling reason for considering trust is so that they can be
used in a variety of ways to distribute your assets according to your wishes. And while there’s lots of different
kinds of trusts, trusts typically fall into two categories: revocable and irrevocable. The revocable trust is often
referred to as a living trust. It’s a flexible arrangement that you can change, you can dissolve it at any point, you
have control over the assets, and because you have control, generally the assets are considered yours and are
included in your estate for federal estate tax purposes. Your estate planning attorney can help you decide
whether a revocable trust makes sense for you given your own particular situation. A living trust is a tool for you to
accomplish your estate planning goals, and your attorney can help you decide whether you should establish such a
trust and will likely ask you to make some decisions on what we refer to as the revocable trust team. That team is
the people that are involved in the trust, and typically they involve the following people. You’ve got the grantor or
the settlor ‐‐ that’s the person who creates the trust and funds the trust. If you create it, then you’re the grantor.
A revocable trust has to have trustees, and the trustees’ role is to manage the trust for the benefit of your
beneficiaries. You and your spouse could serve as trustees, and you can make decisions as to who the successor
trustee is, so that upon your passing or your incapacity, generally you’ve designated somebody to take over
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management of that trust during those times. And then, in addition, you should decide ‐‐ if you decide to establish
revocable trust, you need to think about who the beneficiaries are going to be of your trust. In most cases, you’re
going to be thinking about a primary beneficiary or beneficiaries, and you’re going to be that beneficiary during
your lifetime, but after you die, your heirs or whomever you choose will become the beneficiaries.
One very important component of a living trust is choosing a successor trustee. And it’s a very important decision.
My experience has been that many estate plans live or fail based on choice of successor trustee, and so it’s
important that we go back to that for just a minute. The successor trustee is the trustee who steps into the shoes
of the trustee after the trustee becomes incapacitated or passes. And they generally have the responsibility of
managing the assets for the benefit of the beneficiaries. So you need to carefully consider who should be named
as successor trustee. And there are very, very important considerations. This slide names a few. Trustees’
experience, you should really consider the trustees’ ability to be objective, the age of the trustee, and I think you
should also think about their ability to be objective and neutral in settling the estate. And there’s two additional
items that you might want to consider when you’re choosing a successor trustee. The first is the willingness of the
successor trustee to make a long‐term commitment to the role of the trustee. And in light of this concern, many
people often consider selecting a corporate trustee to serve as the successor trustee. Generally speaking, a
corporate trustee’s neutral, has professional resources, has considerable experience, and can manage the trust for
generations without interruption.
So let’s look at how these documents typically fit together in a typical estate plan. Let’s start with the will. Even if
you have a trust, a revocable trust, typically you still need a will, and we call those a pour‐over will. Essentially
what it does is if there are any assets that the trust doesn’t control, it pours them over into the trust at your death.
Then there’s the trust, and we’ve already talked about that revocable living trust. For married couples, very often
your trust document contains a formula that calls for the creation of other trusts in order for tax savings, and this is
an important topic to discuss with your estate planning attorney. And all of these trusts are typically managed for
the primary benefit of your surviving spouse and your heirs. And given all this complexity, we always suggest that
customers speak to their attorneys and their tax advisors regarding their specific situation.
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So let’s talk about a couple of common questions. The first one is when should an existing estate plan be reviewed
or updated? Besides the fact that you really should take your plan out occasionally and read it and ask yourself, is
this still what I want to have happen? ‐‐ and every situation is different. Generally speaking, I think it’s a very good
idea to update your estate plan at a minimum every three to five years or even more if you change your state of
residence, if there’s a major life change like receiving an inheritance, or you experience health issues or another
life benefit. A lot of people make the mistake of thinking that estate planning is an event, and it’s not. It’s a
process, and consequently that process is important.
Additionally, a lot of people ask, should I involve my family in the estate planning conversation? And I think very
often it can be a very important dialogue to have with your family members. More often than not, having that
dialogue with the family ends up making the administration of your estate and the execution of your estate a much
more successful proposition. And if you’re thinking about involving your family in the planning process, there are a
number of benefits that it brings to your family. It gives you an opportunity to pass on your family values. It gives
you an opportunity to bring your family a sense of empowerment in the process. It helps your family to develop a
common philosophy about your family’s legacy and how it could be carried off for generations. It helps to prepare
your family if somebody becomes incapacitated and allows your family to take advantage of some of the best tax
strategies. And if you’re thinking about sitting down and talking with your family about these things, here’s a
couple of tips that you might think about in communicating your plans to your family. Number one is be sincere.
Second, let your loved ones know that you’re putting together a plan for their benefit. It’s a good idea to set up a
time in advance or to choose a time at the spur of the moment that’s not going to be interrupted: a nice, calm,
long walk is a good time to talk about that. And choose a comfortable environment.
Again, creating an estate plan that meets all your wishes and all your objectives really shouldn’t be a do‐it‐yourself
project. And while all decisions are yours, you may find that you need a professional to help you properly
articulate your wishes, avoid legal and financial mistakes, and reduce taxes. And there can be a number of people
that are involved in this ‐‐ a financial services person, professional, can help you see the bigger financial picture,
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identify estate planning needs, and get the ball rolling; your attorney, who’s responsible for drafting the legal
documents appropriate for satisfying your objectives; your accountant, who can play the roles of identifying
planning and objectives, valuing your estate assets, and helping you consider potential tax consequences; and if
appropriate, a trust officer, who’s going to be responsible for overseeing and investing your trust assets in a
manner that your goals can be satisfied. Keep in mind, a trust officer’s not always included, but in a situation
where you have a corporate trustee, a trust officer can be an important part of that.
And how can Fidelity help? Well, we can work closely with you to identify your objectives and explore a variety of
possible strategies, and then you can discuss these strategies with your estate planning attorney, who can help you
determine which ones are right for you.
So what can you do to jump‐start the planning process? Number one, if you didn’t get it before, I’m going to say it
again, because it is very important: review those beneficiary designations. Make sure all of your primary and
alternate beneficiary designations are current and in line with your estate plan. And if you have Fidelity accounts,
Fidelity makes it very simple on Fidelity.com to change beneficiaries. And I just want to take a couple of minutes
to walk you through those. So there’s essentially five steps to reviewing and updating your beneficiaries on
Fidelity.com. Obviously you log on to www.fidelity.com, and then you click on the “Customer Service” tab in the
upper left‐hand corner of the website. Once you’ve done that, then a list is going to come up, and from that list
you can choose “Beneficiaries,” which is the third option. Once you do that, then on the next page there’s a big
blue bar that says “Update Beneficiaries.” And you can click on that and you can update your beneficiaries. This
will take you to a list of all of your Fidelity accounts, and under each account is a link that says “Update
Beneficiaries.” You can go through each one of those accounts and update all of them right there online on
Fidelity.com.
Now I’d like to turn it over to Matt George to provide us with a demo on FidSafe®, which is a safe, easy, no‐cost
way to store, organize, and access your digital copies of your family’s important documents. After the demo, Matt
and I will take some time to answer some of the questions coming in from the audience today. Matt is a senior
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product manager with the Fidelity Center for Applied Technology, or FCAT. As a senior product manager, Matt is
responsible for representing the voice of the customer and for setting the vision for new products, and is currently
working on FidSafe®, which is a service of Fidelity Labs.
Matt George: Thanks. I’m Matt George, the product manager of FidSafe®, a product out of Fidelity Labs. And I’m here to share
with you a little bit about the FidSafe® product and hopefully share a few ways that you might find FidSafe® a
useful tool in your estate planning process or in your everyday life.
So when I’m asked what FidSafe® is, the way I often describe it is a virtual safety deposit box. So when we built
FidSafe®, we wanted to create a safe way for anyone to store copies of their most important documents that they
wanted to share with other people. Maybe that’s an attorney, or maybe that’s a financial advisor or a family
member. And, you know, we’ve found that a lot of families find it difficult to have a conversation around death
and estate planning, and FidSafe® and sharing documents is an easy way to start that conversation and to make
sure that the people who need the copies of these documents have access to them at the right time.
So when you’re ready you can sign up, and it will take you to the FidSafe® application, which is at
web.FidSafe®.com. And so we only ask you for a few basic pieces of information here, but with these few pieces of
information, you can verify your email address, set up security questions, and link a phone number for an extra
layer of security. But I’m going to go ahead and log in with the account that I already have created. And that’s
[email protected], and we’ll type in the password here and sign in. It takes just a second to authenticate you
as a user. Everything that is in FidSafe® is encrypted with 256‐bit encryption, both while it’s in transit and at rest
while it’s stored on our servers and we have strong both procedural and technological procedures and software in
place to make sure that your documents are safe and secure. So when you log into FidSafe® for the first time, this
is kind of what you’ll see. We’ve started you out with a few different documents; one is just kind of a checklist of
things that may or may not be important to you, so giving you some things to think about, and not all of these
things will be applicable to everyone, but as you can imagine, when you’re building an estate plan, there are lots
and lots of documents that you might need to collect based on your specific situation. And so these are just some
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things to get you started, but an attorney or a financial advisor will certainly be able to help you with specifics. You
have kind of folders over here ‐‐ we’ve given you some folders to start with, and we’ll show you in a second here
how those can be customized based on your needs ‐‐ and then contacts that you’ve invited to join you at FidSafe®,
and we’ll show you that in a second, too. So the first thing I’m going to do ‐‐ I’ve spent some time gathering all of
the important documents, and I’m ready to upload them, copies of those documents to FidSafe®. So I’m going to
add an item and select those documents. I can select them like I would normally, or I can drag and drop them; I’m
going to select a bunch here. I’ve got a little bit of everything as an example. And FidSafe® will begin to upload
these documents. And again, these are all encrypted at the document level when they reach the FidSafe® side.
So here are all of the documents that were just uploaded. This is a lot of documents, not very organized, so this is
where folders come in handy. And like I said, we set you up with some folders to start with, but maybe I want to
add something different, or I want to add 2014 taxes, because I group tax documents by year. So I can add a
folder, type that in, and then I can just drag this and create a sub‐folder if I wanted to here. So now I have my 2014
taxes subfolder, I’ll select that document and just drag it, drag and drop it right into that 2014 tax folder. So when I
click on the tax folder, here it is.
Storing these documents and organizing copies of these documents in FidSafe® is one thing, and you can access
them from anywhere on any device. But what we really built FidSafe® for was so you could share them with other
people. And so when I’m going to do here is just quickly add a contact here ‐‐ I logged in as John Doe, so we’ll
invite my wife Jane Doe, and she’s got the same email address as me, janedoe.com, and we’ll give her an avatar
that represents her. So with that, we’ll invite her to FidSafe®, and we’ll send that invite to Jane. So you can see
Jane is listed as a contact here, she’s kind of grayed out, and she will be until she accepts my contact request. So
Jane has received an email from me at FidSafe®, for FidSafe® on my behalf, and she’s created her own account and
she’s accepted my sharing or contact request, and so now Jane’s avatar turns green and she shows up with my
contact list. We get a notification that Jane has accepted our sharing request.
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So the next step is sharing these important documents with Jane. And so the first way to do that is to select the
document and share it and select Jane from our contacts here, and then I can also select whether I want Jane to
view and download this document, or to be able to just view it only. So we’ll give her view and download
permissions and share that document with her.
So that’s sharing files with Jane. We’ll get another notification when Jane views that file. And then the last way
that we can share files with others is what we call Sharing After Death. As we’ve talked to users all over the
country, we’ve heard lots and lots of stories around unpleasant experiences after someone passes away ‐‐ folks
traveling across the continent and spending days digging through boxes in the attic or files in a filing cabinet,
spending hours with banks and insurance companies on the phone, or traveling around to different banks and
different safety deposit boxes, trying to figure out what is where. And sometimes they don’t even know what
they’re looking for. I actually had a story of someone who stored cash in coffee cans that were buried in the
backyard. And so we really see FidSafe® as a place to store copies of documents, but also notes and directions to
where things are and what’s important and what you care about most, and to be able to share that information
with people at the right time. And so whether that’s an attorney who’s working on your estate plan now or that’s
a family member who you want to see something after you pass away, we’ve created this feature called Sharing
After Death. And so once you’ve added a contact, you can sign up for Sharing After Death, and then you can select
any person in your contact list as a designee. And what happens is, when you pass away, if Jane were to send us,
the FidSafe® team, a copy of your death certificate, once we validated that she would have access to your
important documents and notes. And we hope that that, in and of itself, makes the experience that’s really
stressful a little bit easier to bear. At least we’re not ‐‐ we’re alleviating one of the burdens that is a real pain.
So that’s FidSafe® in a nutshell. I’m really happy and fortunate that you gave me the time to speak, and really
proud of the product that the FidSafe® team has produced. And I hope that you’ll check out FidSafe®.com after
the webinar, and we’ll see you as a user.
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Andrew Hamil: So now we want to change gears and we want to go ahead and look at some questions that we’re getting from the
audience. You guys have been fantastic in the participation, and our board is lighting up with a number of
questions. And we’d like to get to them all, but we only have about 15 minutes. But we’ll do our best to get
through as many questions as we possibly can. And Mark, if it’s OK with you, I’m going to start with you. Can a
trust be named as a beneficiary for an IRA, or does it have to be a person named only?
Mark Albertson: That’s a great question. A trust can be named as a beneficiary of an IRA. The challenge is that IRAs are one of
these peculiar assets in estate planning in that somebody’s going to pay those income taxes, and somebody’s going
to pay them at a certain rate. And so consequently, who you choose as a beneficiary for your IRA has very
significant tax consequences involved, and is one of those things that you don’t want to do lightly. You want to be
very careful that you establish the trust in a way that is the most tax‐efficient to be able to do that. But the nice
thing is that the regulations have changed in recent years to allow trusts to be beneficiaries if they’re structured
properly, which means you can control the distribution of those assets and even the management of those assets
for beneficiaries who are young, which you weren’t always able to do. So you do have some options now that you
didn’t have before.
Andrew Hamil: Great. Now, Mark, you were talking about revocable trusts earlier, and we do have a question from the audience
around ‐‐ wouldn’t the revocable trust end at death? Why would a successor trustee have to be available for
generations?
Mark Albertson: Well, the successor trustee doesn’t necessarily have to be around there for generations. Very often, people set up
a trust that just says, “When I die, give my stuff to the following people.” And the trustee’s only job really is to pay
the taxes, sell the assets, and distribute the assets to the beneficiaries. But very often, people want to leave assets
in trust for specific purposes. So let’s say you have minor children that they need to be in trust for a long time, or
you want the assets to stay in trust for future generations, which, there can be some very beneficial reasons for
doing that. In that situation, the trustee may very well have a generation or two‐generation or even a three‐
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generation job. Probably not the most common way to do it; very often, the trustee’s job’s over quickly, but not
always.
Andrew Hamil: Great. Thank you, Mark. And Matt, turning to you, and the board is lighting up on FidSafe®, and most of the
questions are around the same theme. So can you talk a little bit more ‐‐ now, you touched on this in the
presentation, but maybe talk a little bit more about the security of FidSafe®? That seems to be the most common
question we’re seeing on FidSafe®.
Matt George: Yeah, sure, and this is a question we get all the time, and understandably so: without security, you know, the
product falls apart, so it’s something that we take very seriously. And we adopted a four‐pillar approach to
security that employs some of the industry’s strongest electronic security measures: identity verification measures,
procedural, and physical security measures. So one critical component to FidSafe® that I kind of breezed over in
the demo but I didn’t actually show was FidSafe’s requirement for two‐factor authentication by user. So when you
log into your account, in addition to a username and a password, we offer the ability to either set a unique code,
created each time, to a mobile device, or offer you the ability to choose a set of security questions that you control
the answer to. And so that’s just one of the additional components, and additional to the physical, procedural, and
electronic security measures that we’ve implemented to help safeguard you and your documents.
Andrew Hamil: Great. Thank you, Matt. So Mark, you had talked about the mini‐estate plan when you were talking about
beneficiary designations. Is it OK if everything is in transfer on death or joint tenants? Particularly, what if you
have an estate that’s much less than the federal limit? Do you actually need an estate plan if everything’s titled,
transfer on death, or joint tenants?
Mark Albertson: Well, let’s start with the fact that that is an estate plan. So any time you designate a beneficiary, that is an estate
plan. I think probably the more important question is if everything passes by beneficiary, do you need to have a
will or a trust? And the short answer is that, you know, sometimes people do have assets that they’ve just named
beneficiaries, and all of their assets are going to pass, and there’s going to be nothing for the will to control. On
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the other hand, I think it’s still a good idea to at least have a will, even if you’re passing things by beneficiary
designation, because you never know, if there’s a random asset that doesn’t pass by beneficiary, and very often
there are assets that you can’t pass by beneficiary ‐‐ in most states you can’t pass a house by beneficiary, for
instance ‐‐ then a will is going to pick up on any of those assets that don’t pass by beneficiary, and so consequently
it’s important. So I think the better question is, do you need a will even if things are passing by beneficiary? And
the answer is, it’s a good idea to have one.
Andrew Hamil: Now, what about the properties that are not part of the probate, like these joint bank accounts, or assets that are
transfer‐on‐death? Are they still part of the taxable estate?
Mark Albertson: That’s right. A lot of the time people think that assets that pass by beneficiary aren’t taken into consideration for
estate taxes, and the answer is no. Everything you beneficially own at the moment of your death is included in the
value of your estate ‐‐ all of your joint tenants, all of your beneficiary designations, even the death benefit of your
life insurance is included in your estate. So just designating beneficiaries doesn’t eliminate the potential estate tax
on it.
Andrew Hamil: OK. Now, back to IRAs. As you might imagine, we’re getting a lot of questions on IRAs. Will designating children
instead of a spouse as a beneficiary for an IRA assets have any tax advantage?
Mark Albertson: Probably the only tax advantage to designating children rather than spouses is that if the children receive the
assets, they can convert them into what’s known as inherited IRAs or beneficiary‐designated IRAs. And that allows
them, under certain circumstances, to stretch out the minimum distributions over the course of their lifetime. If
the children are very young, then those distributions can be stretched out over a much longer period of time. On
the other hand, designating a spouse allows the spouse to roll that IRA into a spousal IRA, which is an IRA for all
purposes. So if that spouse isn’t 70 and a half, they may potentially not have to take out minimum distributions.
So it’s a complicated tax question, and it’s one of those, before you ever decide to forego naming a spouse, get
some good tax advice, because there are some important consequences.
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Andrew Hamil: Great. Now, Mark, on the flip side, there often is a fee for developing an estate plan, and we’re getting a lot of
questions around cost. Could you ‐‐ I mean, obviously this is going to differ state to state, market by market, but
could you give us a general sense on what an estate plan might cost and some of the variables that are involved
there?
Mark Albertson: Yeah. And I get a lot of these questions when I’m meeting with Fidelity clients also. And I know that cost is always
a consideration, because nobody wants to spend too much. And on the other hand, you’re probably not wise to
spend too little. And so what that number is really is going to depend on a lot of things. How complicated is your
estate planning? So as we mentioned before, very often people can pass pretty much everything by beneficiary
designation, or they don’t have a lot of assets and a simple will is fine. The more complicated things are and the
more complex your goals are, obviously the more expensive it’s going to be to establish that. But I think probably
the most important thing is that there’s just nothing wrong with, when you sit down with an attorney to talk about
your estate planning, to ask them in advance what it’s going to cost, before you ever hire that attorney. Even if
they bill by the hour, they should have a really good concept of the approximate cost it will take to complete your
plan, and many estate planning attorneys will quote a flat fee for their services.
Andrew Hamil: No, that’s great, Mark, appreciate that. Now, turning our attention a little bit to the trust and trust funding in
particular, we have a great question here: “Is listing my trust the beneficiary in all of my financial accounts the
same as putting all of these accounts inside my trust?”
Mark Albertson: Yeah, that’s a great question. The answer is no. It may ultimately have the same result, but the answer is no,
because if your trust is just the beneficiary of accounts, then what happens is that when you pass away the trustee
has to wait for a death certificate, file that death certificate with the financial company, fill out the forms to
transfer those assets, go through the process of transferring those assets into the trust, which even as a
beneficiary designation could take four, six, eight weeks in order to get everything into the trust. In addition, if it’s
not in the trust and you become incapacitated, your trustee does not have the ability to manage those assets for
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your benefit during your incapacity. And on the flip side, if those assets are actually titled in the name of your
trust, then at the moment of your incapacity, the trustee has full legal ability to manage those assets, and it can
also eliminate some delays between the time you pass away and the time the trustee has the ability to manage
those assets. Either way, the trust is going to be able to distribute those assets to the beneficiaries, but it may be
more prudent to have assets titled in the name of the trust rather than just simply the trust as a beneficiary.
Andrew Hamil: And what about the timing of that funding? Listening to you talk it sounds like there might be some advantage to
funding a trust sooner rather than later.
Mark Albertson: Yeah, yeah. I suppose the best word would be to be sure that you fund it before you die or become incapacitated,
because the trust only controls what the trust owns. And so consequently, you know, the best way to do it is
transfer those assets into trust as soon as possible after getting the trust established.
Andrew Hamil: And what about the assets that can go into the trust?
Mark Albertson: Yeah, that’s another great question. Anything can go into the trust ‐‐ the question is whether it should go into the
trust or not. And there may be tax consequences to transferring assets. So, you know, the likely things that go
into a trust are your real estate and your financial accounts. What doesn’t go in the trust and is rarely a prudent
thing to do is to transfer your IRAs or other retirement accounts into the trust, because the IRS says a person has
to own those, and if you transfer the ownership into a trust, it could be considered a distribution for tax purposes,
and all those income taxes are going to be due. But, you know, that being said, more often than not, pretty much
any other asset can be transferred into a trust.
Andrew Hamil: Great, and I have time for just one more question, Mark, and I hope it’s a simple answer. But can you talk a little
bit about what happens when you move to a state ‐‐ so if I create my will and trust in Rhode Island and then I
move to Massachusetts, is that will and trust still valid?
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Mark Albertson: Yes and no. You know, the Constitution requires states to honor contracts that are valid in other states, and so
odds are if you had a valid plan in one state and you moved to another state, it’s going to be valid. But just
because it’s valid doesn’t mean it’s the best, because every state has its own little magic language that makes an
estate administration better or worse. And there can be very different documents from state to state. So I think
the best thing to do is if you move to a new state, take your planning documents in to an estate planning attorney
in that state, have them review them and let you know whether things are better off being updated based on the
state that you’re in now.
Andrew Hamil: Right. Well, Mark, Matt, thank you both so very much. We certainly appreciate your commentary and insights.
And I’d also like to thank all of our audience for attending the event. Excellent thoughts, and I thought the
questions were absolutely fantastic, as always. Please reach out to your Fidelity Investment professional to discuss
your personal plan and investment opportunities. So thank you again, everyone, and have a great afternoon, and
please remain on the line for some important disclosures to follow from the operator.
Operator: So before we go, I have some important information pertaining to what you just heard. The information presented
reflects the opinions of Mark Albertson and Matt George as of June 23, 2015. These opinions do not necessarily
represent the views of Fidelity or any other person in the Fidelity organization and are subject to change at any
time based upon market or other conditions. Fidelity disclaims any responsibility to update such views. These
views may not be relied on as investment advice, and because investment decisions for a Fidelity fund are based
on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund. As with
all your investments through Fidelity, you must make your own determination whether an investment in any
particular security or fund is consistent with your investment objectives, risk tolerance, financial situation, and
your evaluation of the investment options. Fidelity is not recommending or endorsing any particular investment
options by mentioning it in this conference call or by making it available to its customers. This information is
provided for educational purposes only, and you should bear in mind that loss of a particular state in your
particular situation may affect this information. The information provided in this presentation is general in nature,
is provided for informational purposes only, and should not be construed as legal, investment, or tax advice.
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Fidelity Investments does not provide legal or tax advice. Investing involves risk, including the risk of loss. Fidelity
Investments cannot guarantee that such information is accurate, complete, or timely. Laws of a particular state or
laws that may be applicable to a particular situation may have an impact on the applicability, accuracy, or
completeness of such information. Federal and state laws and regulations are complex and are subject to change.
Changes in such laws and regulations may have a material impact on pre‐ and/or after‐tax investment results.
Fidelity Investments makes no warranties with regard to such information or results obtained by its use. Fidelity
Investments disclaims any liability arising out of your use of, or any tax position taken in reliance on, such
information. Always consult an attorney or tax professional regarding your specific legal or tax situation. Keep in
mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose
money. FidSafe® is not a Fidelity Brokerage Services LLC service. FidSafe® is a service of Fidelity Labs, a Fidelity
Investments company.