Most everyone in the country has heard about the Georgia husband and father, Robert Gary Jones, who was killed by an airplane while jogging on the beach on Hilton Head Island, South Carolina. This accidental death will no doubt spur a lawsuit against the pilot of the plane, Edward I. Smith.
As an estate planner, this tragic story prompted several questions in my mind:
- Did Mr. Jones have a will or trust that would help save taxes and protect his assets for the benefit of his family?
- Did he have sufficient life insurance to provide support for his wife and young children, including college education for the kids?
- Had he discussed his wishes for funeral arrangements and disposition of his remains with his wife?
- Does Mr. Smith have sufficient liability insurance coverage to pay the damages that will be demanded from Mrs. Jones?
- Did Mr. Smith arrange his assets in a way that will help protect him and his family from the devastating effects of a wrongful death lawsuit?
This event is an example of the fact that one never quite knows what will happen, including a sudden death. Don’t leave yourself and your family exposed – contact an estate planning attorney today. Preparation may not prevent incidents from occurring, but it sure can ease the effects of the aftermath.
Hiring an attorney to guide you through the estate planning process does not have to be a fearful experience. Instead, it can be the most empowering decision one makes to provide necessary counsel and advice.
Following are 10 questions you should ask before engaging an estate planning lawyer to help you plan now to protect yourself, and to preserve your estate for your family:
1. Do you prepare a comprehensive plan for the care of my child(ren), if something happens to me, that names both short and long-term personal and financial guardians and gives specific instructions to these guardians?
2. Are all of your fees flat fees? What about for ongoing work after the initial completion of my estate planning documents? What happens when I call with legal questions two (2) years after my estate planning documents were completed? What if the questions are about something other than my estate plan?
3. Do you have a knowledgeable team in place or is it just you? What happens if something happens to you?
4. Do you make sure my assets are titled properly? How?
5. What happens when things change in my life? Do you notify me about changes in the law which might impact my estate plan? How often do you communicate with me?
6. Does my estate planning fee include a regular review of my plan? What if I want to make changes to my plan?
7. Do you have an “Estate Planning Client Care Program” for your clients and, if so, what does that include?
8. Do you have a process for helping me capture and pass on my “intangible wealth”, such as my spiritual, moral beliefs, and what I believe is most important in life, which I also want to pass on to my family?
9. Can you structure my estate plan so that property I leave to my family will be protected from potential lawsuits, as well as distributed only to my immediate family members, if one of my children or grandchildren should ever get divorced in the future? How do you build that kind of protection into a client’s plans?
10. Can you help me make smart choices about things like reducing estate taxes, saving for college education expenses, and strategies designed to allow my retirement plan assets to become a lasting legacy for my family?
Knowing the answers to these 10 questions, before you engage an estate planning attorney, will ensure that your estate plan will really work for you and your family, in 2010 and beyond, when your family needs it most.
Five Common Estate Planning Mistakes
#1 Incapacity Issues
In Pennsylvania, upon the attainment of age 18, individuals are considered an “adult” citizen, becoming responsible for their own personal, health care and financial decisions. Even one’s parents become strangers, in a legal sense, in the event of an incapacity. This same legal strangerhood status applies between spouses.
As a result, every adult American, married or single, should appoint agents through properly drafted Durable Powers Of Attorney to make their personal, health care and financial decisions, in the event of their illness, injury or incapacity. Alternatively, a formal legal proceeding, known as a Guardianship hearing, involving at least two lawyers, plus a judge, may be required to appoint agents to make such decisions for your clients, with future ongoing supervision by the Court. And a Guardianship proceeding, along with the results which follow, can be rather expensive, restrictive, and invasive of a client’s privacy.
#2 Minor Children Matters
As a parent of a 12 year old son, I can attest to the fact that, If we are blessed with children, then they are our most valuable assets. But what happens if a minor child is orphaned? Who would raise a child or children to adulthood and impart prudent morals and values to them? In most states, only through a Last Will & Testament can our clients appoint the appropriate guardians (i.e., back-up parents) for minor children. Alternatively, a formal legal proceeding may be required to appoint a guardian for a minor. Again, this legal process may be expensive and public, and there is no guarantee that a local judge will appoint the same individual that your client would have selected.
#3 Death & Taxes
When it comes to transferring all of our property and earthly possessions upon death, our clients can either make it easy on their loved ones, through proper estate planning, or they can leave it up to the probate court system by default. As I have shared with many of my clients, “If you do not have an estate plan, your family will inherit the State’s Plan”. Over the past 28 years in which I have worked as a trust and estate attorney, I have found that no client wants his or her property distributed in accordance with their state’s intestacy statute. Without exception, lifetime planning is the more efficient and effective option. Only through creating an up-to-date estate plan are clients able to ensure that their property distributes to the right party, at the right time and in the right manner. There are a variety of estate planning strategies to accomplish an orderly disposition of our clients’ property to their designated beneficiaries.
Benjamin Franklin astutely observed that the only two certainties in life are Death & Taxes. And a Supreme Court Judge has stated that no taxpayer should pay more than his or her fair share in taxes. That said, an up-to-date estate plan, prepared by a competent estate planning attorney, can save your clients hundreds of thousands of dollars from unnecessary transfer taxes and administrative expenses. If your clients are married, their estate plan can be arranged to take full advantage of the available estate tax exemption next year, and in future years, through a combination of proper ownership of assets, combined with implementing effective planning strategies designed to maximize the distribution of property to selected beneficiaries.
#4 Inheritance Risks
Nobody values the worth of a dollar as much as the person who earned it, and paid income taxes on it. Therefore, my experience reveals that careful consideration should be given to protecting and preserving an inheritance from squandering it away, or the many misfortunes of life that your clients’ beneficiaries might confront. This can be accomplished through flexible trust planning techniques, designed to ensure that your clients’ property passes to the right person at the right time. Properly structured, trusts are infinitely more effective, when compared to an outright distribution of property, since a flexible trust can protect and preserve an inheritance for one or more generations. A trust is also a very effective technique to insulate an inheritance from being squandered away, or lost as a result of a divorce, adverse judgment from a lawsuit and as a result of a bankruptcy.
Bottom Line: Without proper estate planning, a lifetime of thrift and prudent investments can disappear in a season of conspicuous consumption, or through a multitude of personal misfortunes that can be encountered by a beneficiary.
#5 Procrastination Perils
It is not easy to face our own mortality, and that is why the majority of adult Americans do not have a Will or any estate planning documents. More specifically, over 65% of our clients lack even a basic Will, or they have outdated plans that no longer meet their personal circumstances and financial needs. As a result, these otherwise responsible adults may leave a legacy of unnecessary pain and conflict for their loved ones, instead of a lasting legacy for their family and selected charitable organizations.
Please contact The Levin Law Firm at (610) 977-2443 to arrange a Complimentary Consultation for your selected clients in order to help them ensure that their property passes to whom they want, how they want, and when they want, in the most tax-efficient manner.
I thought you would find this article, Estate Planning as a Family Conversation, by Deborah Jacobs, published in The New York Times on March 4, 2010, to be of interest, both personally and professionally, especially for your clients who can benefit from working with an estate planning attorney to ensure that their estate plan is up-to-date and reflects their current dispositive intentions.
The 3 “Take-Aways” are as follows:
1. “Families that speak freely about estate planning can sometimes address awkward situations that might arise, like the choice of the executor – who is in charge of distributing assets after someone dies – or succession plans for a family business, or the leaving of assets in trust.”
2. “A trickier situation involves adult children who notice signs of a parent’s mental decline. Once parents become incompetent, they lack the legal capacity to make binding commitments, so it is important to sign estate planning documents before that happens. But broaching the matter may threaten a parent’s independence and desire for control.”
3. “Sure, it is easy to get frustrated with parents who do not put their affairs in order. But keep in mind that having the conversation requires them to confront their mortality. For both parents and children, that can be a gigantic step.”
Please do not hesitate to contact The Levin Law Firm whenever we can be of service regarding estate planning matters.
CBSMoneyWatch.com: At first glance, the failure of Congress to plug the 2010 estate tax loophole appears to be good news for children of ailing rich parents — and of little consequence to everyone else. But in fact, by letting the federal estate tax lapse this year, Congress has created a number of very significant unintended consequences and increased the chances that you a client’s family will owe taxes on an inheritance. Yes, the consequence of the disappearing estate tax in 2010 means that some beneficiaries may owe capital gains taxes on inherited assets but not incur a federal estate tax liability. In addition, since many Wills and Trusts have been drafted with the assumption that the estate tax exists, a Will that made sense last year (or any other year, for that matter) could result in your surviving spouse getting little to no property from your estate. Here’s what you need to know about the estate tax, and how to protect yourself and your heirs, at least until Congress takes action. I’d recommend checking out this powerful video from Eric Schurenberg, explaining how critical estate planning is (from CBS MoneyWatch.com):
