Financial Privacy

In Estate Planning, Wealth Management by Brad Stark


By Brad Stark, MS,CFP®
Co-Founder and Chief Compliance Officer

Nothing exposes your wealth to the world as quickly as the court system, as made evident by recent celebrity divorces. While you can’t necessarily protect yourself from people filing lawsuits, you can avoid the most public court of them all, probate. But even having a trust will not necessarily keep all private. There is more to it.

“There are two major items to protect when it comes to public exposure, your wealth and your potential incapacity,” according to estate planning attorney Gamble Parks of Fell, Marking, Abkin, Montgomery, Granet & Raney, LLP. The name of the game is “avoiding conservatorship and probate, which can be accomplished with properly effective powers of attorney (POA) and health care directives to go along with a trust.”

People generally start their planning with a will, but since that does not protect privacy from the court system, they usually implement a trust. While the trust avoids the probate court, you can also accomplish that by holding ownership in assets under “right of survivorship” title or pay on death accounts. So how does one recognize potential issues ahead of time and where to plan?

Out of Date Power of Attorney: People oftentimes implement estate planning documents as they head into retirement and then forget about them. As people age, so do their named trustees and powers of attorney for such things as health care and financial decisions. If the people named in the documents are no longer alive, unwilling or unable to step in when needed, court intervention may be required.

“It is a given that documents should refreshed to reflect intentions and the responsible parties to follow, but outlining triggering events to determine capacity is paramount,” according to Parks. From time to time we see situations where the estate is “stuck.” This usually occurs when a person is no longer capable of handling their affairs and while it is clear to family, friends and advisors, the person may see things differently. If they are unwilling to relinquish control, sometimes it comes down to a court order, which is just something all want to avoid.

Beneficiaries: If someone or an entity is a named beneficiary in a Trust, even for a small amount, they are entitled to a copy of the document and the details of the estate. While your privacy may be protected from public view, that does not mean that others are not privy to your entire financial makeup. “If someone wants to name a charity as a beneficiary of the estate and keep their assets private, a great way to do that is via their IRA accounts,” according to Parks. While they are privy to only this one account, the charity also avoids the income taxes associated with IRAs.

There are other accounts and structures that avoid probate and that can be singled out from the rest of the estate. These are generally in the form of annuity contracts, life insurance policies and pay on death (POD) accounts, all passing by beneficiary elections tied to those accounts.

Improperly Titled Assets: Getting a trust drafted is one thing, but making sure it is properly funded is another. During the refinance process it has been common for banks to request the property be removed from a trust (in essence they don’t want to deal with ownership other than you). “Some people forget to put the property back in the trust after the financing takes place,” according to Parks.

The key to keeping your financial affairs private really resides with how your own your assets, who is in charge after you are no longer able and who has the legal access to your information either by choice or by requirement. Parks reminds us that “many issues are avoided by having current documents that are properly funded and clearly outline triggering events that name people you trust to carry out your wishes.”

Published in the Montecito Messenger's "Montecito Money" column.

About Mission Wealth
Mission Wealth’s vision is to provide caring advice that empowers families to achieve their dreams. The founders were pioneers in the industry when they embraced the client-first principles of objective advice, comprehensive financial planning, coordination with other professional advisers and proactive service.

Mission Wealth does not sell any internal products; therefore, the firm’s recommendations are solely in the client’s best interests. Mission Wealth’s holistic planning process helps clients enjoy greater peace of mind.



Founder and Chief Strategy Officer

Brad is the Co-Founder and Chief Strategy Officer of Mission Wealth, which has been recognized as one of America’s “Top Wealth Managers.” Brad is also a member of the firm’s Leadership Team and Investment committee. It is his visionary excellence in the financial industry that drives the strategic direction of the firm.


Founder and Chief Compliance Officer

About the Author
Brad works directly with a select list of clients and is responsible for the Southern California Group as well as Compliance functions of the firm. As a member of the Executive and Investment Committees, he contributes to the firm direction and client experience