While there are many ways to define “estate planning”, our clients frequently define estate planning as follows:
“I want to control my property while I’m alive, take care of myself and my loved ones if I become disabled, and give what I have, to whom I want, the way I want, and when I want. Furthermore, if I can, I want to save every last tax dollar, professional fee, and court cost legally possible.”
Comprehensive estate planning involves the following areas of concern:
Lifetime Control over Financial and Health Care Decision making
Generally, the areas of “lifetime control” addressed by estate planning can be broken down into three fairly distinct areas: (1) control over financial, legal and property matters; (2) control over personal health care and medical matters; and (3) control over the care and nurturing of minor children and other dependents (if applicable).
Planning for the Quick and Inexpensive Transfer of Assets at Death
Dying can be costly and time consuming, particularly if there is no plan in place. Creditors, financial institutions, and other interested parties must be notified; funeral and burial arrangements must be carried out; debts must be addressed; taxes must be paid; tangible and intangible assets must be protected and eventually transferred to beneficiaries; and the decedent’s overall wishes must be carried out. There is quite a lot to do.
Proper estate planning identifies all of the “hurdles” that may arise post-death, and minimizes their effect. Understanding just what needs to be done for a particular client requires experience and knowledge of the various tools and techniques available. Equally important is a complete understanding of you, our client. You are unique and your needs differ from the needs others may have – no one plan works for everyone.
Planning for My (Our) Family
We often discover that most of our clients have definite ideas about how they would like their beneficiaries to use their inheritance. Similarly, there is usually a strong desire to protect the beneficiary’s inheritance from outside forces, like “creditors and predators.”
An estate plan should address many of the following family maintenance and protection issues:
- Who could best serve as the “back-up parents” for minor children, providing the necessary care, love and nurturing environment;
- How could “continuing trusts” be utilized to safeguard inheritances for minor beneficiaries or other beneficiaries who lack the ability to manage their inheritance;
- How can inheritances for adult beneficiaries be held in trust so as to protect the beneficiaries from potential future divorces, lawsuits, creditors and predators;
- What types of activities, life styles, work ethics, etc. do you want incentivize;
- How you can minimize the potential risk of “affluenza” for beneficiaries who are going to receive sizeable inheritances;
- What if the intended beneficiaries have (or may develop) “special needs” or disabilities?
Elder Law – Specific Senior Issues
A comprehensive and useful estate plan must address the unique challenges faced by our aging population. Elder Law focuses on the legal needs of the elderly, and utilizes a variety of legal tools and techniques to meet their goals and objectives. All of the typical estate planning concepts are still applicable, but the elder law client also frequently needs assistance in planning for possible long-term care needs, including nursing home care and comprehensive end of life decision making. Planning to coordinate private and public resources to finance the cost of care, and working to ensure the client’s right to quality care are all part of Elder Law planning.
Legacy Planning
Legacy planning emphasizes the belief that wealth goes beyond just material possessions. It involves your heritage (ancestors, traditions, heirlooms); your family beliefs, values, and connections; and your community (including work, friendships, affiliations, and philanthropy). Legacy planning is as varied as the individual, and means different things to different people and may include planning for your children and beneficiaries, charitable planning or business succession planning.
Is a Revocable (Living) Trust Plan Right for Me?
A significant number of people equate the term “trust” with the very wealthy, and not applicable to them. This misconception has been fueled by recent increases in the applicable estate tax exemption and the belief that trusts are only useful for tax avoidance. However, there are significant non-tax benefits to living trust-centered estate planning. Let’s retrace our steps for a moment and once again examine typical “goals” many people have as they begin the estate planning process:
- While I am alive and well, I want to continue to have full control over all of my assets and not add to the complexity of my life.
- I want to ensure that my family can maintain control of and benefit from my assets without court intervention during periods of incapacity.
- When I die, I want to give what I have to whom I want, in the way that I want, without needless delay or court intervention.
- And I want to achieve all of these objectives in a way that reduces unnecessary tax liability, attorney fees, and court costs.
Living trusts afford great flexibility in carrying out these wishes. These trusts can serve as a blueprint for detailing how you want your assets managed during lifetime and how you want your estate to be distributed after death. Moreover, revocable living trusts can serve as a “funnel” through which all of your assets can be directed in a seamless transition at death.
As a result, a revocable living trust has emerged as the centerpiece of the client-centered estate plan –based upon its flexibility, efficiency, and its adaptability to many situations. When it comes right down to it, the question is whether or not you feel the need to create a “comprehensive” plan, or whether you are comfortable with a piecemeal approach. The revocable living trust-centered plan is the only plan that enables the coordinated distribution of all of your assets, while maintaining the greatest degree of asset control – both during lifetime and after death.