The importance of a good estate plan…your peace of mind
What will a good estate plan do for you and your family? It will protect you and defend against: (1) unnecessary probate court costs and fees, (2) acceleration or avoidance of income taxes – in the form of maximum deferral of taxes on retirement assets or in maximizing the step up in basis at death, (3) loss of assets to federal estate taxes, (4) loss of assets from lawsuits (legal claims and divorces) (5) loss of assets from wasteful spending. Also, it will or can guarantee your assets will stay in your blood family. Perhaps the greatest benefit of a good estate plan is the peace of mind you will have knowing that you have put these affairs in order.
If you want the protection a good estate plan will do for you, it must be done before you need it. If you have moved from another state, your legal documents should be reviewed and probably updated. At our office, we usually meet with clients 3 to 4 times during a representation. The first meeting is complimentary. The second meeting is to review a draft of the papers. Then, the third meeting is usually via telephone conference or zoom call to answer any questions or make any changes…Then, the final meeting is to get the papers signed.
Let’s say Jake and Emily have a son named Frederick who is married to Sue. Frederick and Sue have a daughter named Amy who get government benefit due to her disability. Jake and Emily want to make sure Sue will not get their assets. The solution is to leave their assets into a trust for Frederick’s benefit, with the remainder to Amy. Doing this will guarantee that (1) Jake and Emily’s assets will not get lost in a divorce if Frederick divorces Sue, (2) when Frederick passes, the assets he inherited from Jake and Emily will go to Amy and not Sue. Jake and Emily can make sure that when Amy inherits what is left over she inherits in a special needs trust so she will not lose her government benefits. If not planned for in advance, Frederick could inherit the assets and lose them to Sue in a divorce or other lawsuit.
On Frederick’s death, Sue could get half, if not all, of those assets. In addition, whatever Amy inherits could jeopardize her government benefits. The bottom line is that if you want to keep your assets in your family, and you want the peace of mind that comes from it, you must plan in advance. You will get peace of mind and your family will thank you for it. Remember . . . a little bit of planning can make a BIG difference.
Mark F. Winn, J.D., Master of Laws, LL.M. in Estate Planning, is a local tax, asset protection and estate planning attorney. mwinnesq.com
