Estate Planning Questions

November 3, 2015 | Posted by Patty Bittle | No Comments

Clients often call me to prepare their estate plans and ask me how much it will be for a simple will. I analogize the question to a patient asking the physician for an antibiotic without knowing the diagnosis. At the end of the day, the clients typically end up having three to five documents. Those documents include a will, a healthcare power of attorney, a financial power of attorney, and sometimes a living will or trust. But the documents are only a part of the estate planning process.

When a person dies, their assets are distributed in three ways. First, by operation of law. For example, if you own your house jointly with your spouse, upon the first to die, the house goes to your spouse, regardless of what is in the will.

Second is by contract. This means your life insurance policies, retirement plans, pension plans, etc. Again, as to the beneficiaries of these contracts, unless we tie them together, the will is for the most part irrelevant. Countless times I have had clients request a simple will and after a short discussion realize that the beneficiaries on these contracts are not who they want. Sometimes, the beneficiary has passed away, or no longer has a relationship with the client or in certain instances, is the divorced spouse from many years ago. Often, people name their children as beneficiaries. While this may be appropriate, unless we create a trust in the will to tie the distributions to their children in installments over a period of time, the children will get all of the proceeds from these contracts upon reaching the age of 18. You may think that your 5 year old daughter is very mature, but do you really believe she could handle a significant amount of wealth at the age of 18? I would be happy if she just took out the garbage.

The third way that your assets are distributed upon your death is your will. If you don’t have a will, the state has developed a dispositive strategy that it believes would work for you. Isn’t it better that you decide for yourself? (Clients have asked me if they don’t have a will, can the state take their money. The answer is a resounding no).

In the end, if your lawyer is not asking you about your jointly held assets and your contracts, you are not getting a complete estate plan. If you’re not completely comfortable with your current estate plan or just want to second opinion, please give me a call. While for the reasons described above I cannot quote you a fee during that call, I will be able to give you a very good estimate after we meet for the first time. Sound fair?

Category : Eisner Law Blog

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