Estate Planning: February 2008 Archives

There is no such thing as a "simple" will.  What should appear to you as a clear and concise "executor's mission statement" is often quite difficult and time consuming to construct and may require considerable technical knowledge, skill, and experience.  The technical and human aspects of the estate planning process must be brought together and placed into a larger context:  the identification and achievement of your objectives.

Simply put, the estate planning process should help you see and solve your financial problems.  This is why "do-it-yourself" Will drafting software sold directly to the public is both inadequate and dangerous; it may fail to consider and address many of the issues discussed below.

·                   Has your Will been coordinated with, or take into consideration the cash flow and tax implications of other dispositive documents such as IRAs, 401(k) plans, pension and profit-sharing plans, group and individual life insurance, revocable and irrevocable trusts, and jointly-held property?

·                   Does your Will reflect recent changes in your personal situation and objectives?  For instance, does it take into consideration changes in your income, received or expected inheritances, newly acquired assets, health conditions, and business and personal relationships?

·                   Have you moved from a community property state to a common law state - or from common law to community property state?

·                   Do you have a second (perhaps vacation home) residence in another state - and how do that state's laws impact on your planning?

·                   Was your Will or trust draw before or after your youngest child or grandchild was born?

·                   Has there been a divorce or estrangement that is not - but should be considered in the Will or trust?

·                   Does your Will provide for an outright distribution when a trust with its helpful management and investment advice and oversight is indicated?

·                   Have you set up a trust years ago that now "overprotects" and "over controls" with respect to assets passing to an informed and financially mature beneficiary?

·                   Is the trust perfectly valid and well drawn - but no longer necessary?

·                   Have you named the right people as personal representatives (executors (ix)), trustees, or guardians?

·                   Are all of the people you have named stable and financially responsible?

·                   Do your documents name sufficient "back-ups" in case the parties you named can't or will not serve or die after starting to serve?

·                   Have you named an individual for a position a corporate fiduciary should serve (or vise versa)?

·                   Have you named your now much older parents as guardians?

·                   Did you name close friends as guardians?

·                   Do the individuals you named as guardians have the economic resources, the strength, desire or will to raise young children?

·                   Have you named someone who will have a potential or inherent conflict of interest - such as naming one of several children as executor?

The solution to many of these questions is to insist that you and your attorney continually monitor and review the "big picture," to co-ordinate, keep each other informed, and most importantly, to keep you fully informed and your documents up to date.

John Lolio