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What are your concerns?Make sure your estate planning addresses real life and you don't end up with bare bones legal documents you don't even understand. It doesn't matter how much money you have - you still need to be responsible and provide "instructions" about what you want done for you and for your loved ones when disaster strikes, whether the disaster is incapacity or death. Be responsible!Put a blank piece of paper in your pocket and for the next week write down your concerns as they pop into your mind. You may be surprised at what you think of and what you have on paper at the end of the week. Now, communicate your concerns to your estate planning attorney. If you have minor children, you must name a guardian in your will to step into your shoes and care for your children. You must also establish a trust to hold assets of the children – this is separate from the guardianship issue and a different person (perhaps an independent “trustee”) should handle the assets. Have you written a letter to the guardian? What would you want the guardian to know about raising your children? Put it in writing! Do you have adequate life insurance to help the children or other loved ones if you are not around anymore? Frank visited with me recently about his three rental houses. They are paid for and he uses the income to supplement his retirement. He was concerned about losing his assets to a lawsuit generated from an incident at one of the rental houses. He had a friend who was sued by a drunken visitor to one of his tenants! We helped Frank by establishing three single member limited liability companies, one for each rental property. Now, if the drunken visitor visits, he exposes just one rental house (bad enough) and not all of his other assets. Isolate your risky assets with "entity" planning. "Joe" stopped by to discuss his estate planning. He wanted to sell a large block of stock to diversify his portfolio and produce added income in retirement. He was reluctant to sell because of the capital gains tax he would incur. We talked about using a special type of trust - a charitable remainder trust, to allow the sale of the stock without paying any capital gains tax. He could diversify for safety and produce more income, all without paying capital gains tax and while getting a sizable charitable income tax deduction for making a gift to charity (which he could use over the next several years). He plans to use a little of the tax savings and part of the extra income to create a special wealth replacement trust to provide a benefit to his two children when he dies. What are your concerns? A woman recently asked me to help her with her estate planning. She had no spouse and no children. I asked her about her concerns and one thing became obvious - she loved her little dog, her companion. We went to work constructing documents to make sure that if she is ever incapacitated and in a long term care facility, her best friend will be cared for and, most importantly, her companion will be brought to her on a regular basis for the visits only a pet can provide. Estate Planning is about real life. She also wanted to be sure her friend will be cared for if he outlives her. What are your concerns? Take time to learn the “truth about estate planning.” |
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