Estate planning involves several important objectives. One of those objectives is to transfer property to the right heirs with the least tax, the least cost, the least hassle, and with precision of timing for younger generations. But there are objectives that are far more important to people than mere tax savings. Those objectives involve assuring appointment of someone to act for incapacitated persons, to act on behalf of our children, and to attend to all necessary affairs.
“Simple” estate planning typically involves preparation of a will, a durable power of attorney (to handle your financial affairs if you become unable to do so yourself); a durable power of attorney for health care (to handle your health care decisions if you lose the ability to make those decisions); a living will (an advance declaration that you choose not to be kept alive by artificial means when death is otherwise imminent); and, often an advance declaration of guardian to assure your preferred person is appointed. In some cases, the powers of attorney turn out to be the most important documents of the plan. Even in small estates, these documents may have to be tailored to the client’s particular family and financial situation, including health problems, family relationships, life insurance, retirement benefits, assets and debts of the client and other factors. A few of the other components that must be considered include:
- charitable objectives
- children and their needs
- disability issues
- federal tax issues
- guardianship issues
- caring for our parents
- varieties and uses of powers of attorney
- Wills and the strong reasons to establish trusts during life
Congress has increased the value that a person can transfer throughout their lifetime and at death to $5,000,000.00. This amount will increase as time passes because the exemption is to be adjusted for inflation. Fewer clients will require planning to minimize federal estate and gift consequences. However, the main focus of estate planning is not tied to tax consequences. It has been my experience that the driving motivation is to establish an enforceable framework to preserve assets and capital value, to control influences that could diminish that value, and to provide for the orderly transfer of ownership to assure value is not destroyed or diminished. Whatever Congress might do with regard to the tax law, a coherent and binding framework is still the only way to achieve those more important objectives.
Humans intending to establish a comprehensive plan to protect assets, preserve control over property, provide for orderly transitions, direct the application of assets in specified ways, and other matters already know this: It is the precise application of the English language that successfully implements plans and directives intended to be enforceable and binding on all persons under the law. Before such plans and directives can be implemented my job is to
- listen attentively,
- raise concerns,
- master the facts,
- explain alternatives,
- advise you about pitfalls,
- receive your decisions, and
- at the end of it all create the legal framewok to establish and enforce your decisions.
Components of the processes followed commonly involve these:
- acquiring a thorough understanding of your assets
- learning your family needs
- comprehending your intended objectives
- constructing a coherent plan that will be binding and enforceable to assure your objectives are attained
Got questions? You can Ask Me.