The term “estate plan” has been commoditized and cheapened to the point of referring merely to a set of documents designed very generally to avoid probate and perhaps minimize estate tax. For this we can blame high-volume trust mills operated by non-lawyers, usually selling on the internet, and also some lawyers who practice this way. Often the trusts they draft simply distribute property outright to children without even recommending further planning.
A good estate plan addresses the real goals you actually have in relation to your whole estate, for the entire duration of the estate:
- Planning for the present
- Planning for periods of disability
- Planning for death
What is your estate? It is all of your assets, now and at the time of your death–everything you own: real estate, tangible and intangible personal property, and arrangements such as life insurance and retirement plans.
For the present, most people want a plan that is not overly complicated, and one that is as flexible as possible, allowing for changes to be made. Some people with sufficient assets may want to engage right away in a gifting program, others may need or want to retain maximum control over all assets during life.
Disability planning is often given short shrift in estate plans, yet about half of all seniors will live with some form of disability. As medical technology improves, increasing numbers of seniors and younger patients are living for extended periods of mental incapacity. Who will take care of you and your family–how will they be selected, and how will they act? Any planning must be done before incapacity strikes.
Planning for death is obviously essential to an estate plan, but most plans fall short even with this task. Sure, the plan documents will usually provide a way to avoid probate and minimize tax, but is the plan properly maintained? Is the trust properly funded with assets so it actually works to avoid probate? Sure, the plan documents provide for passing property to the kids, but is that done in an asset protected way to prevent the inheritance from being misused or wasted by the children, or taken by creditors or divorcing spouses? If you want to give to charity, what is the best way to do that? Would you like to use incentive trust provisions to pass on certain values to your kids? If you have firearms, do you have a gun trust included to ensure the guns are handled correctly?
The cookie cutter approach is a terrible waste of potential planning for your family. Your plan is not really yours if it does not have your goals in mind. There are as many potential plans as there are clients, if only the right questions are asked. This law firm will ask those questions because, as a member of WealthCounsel, we have the tools and resources to get the job done.