Estate Planning: 16 Points to
Ponder
Over the years we have found that clients will feel much more comfortable
with the estate planning process and be more efficient in working through the
process if they focus on those sixteen basic planning questions up-front. We
have also found that anxiety, time and money can be saved if the client is
initially introduced to the basic sixteen questions by an advisor other than
the lawyer.
The 16 questions that the client needs to address in the Estate Planning
process are:
1. What is the value of your net estate? This question identifies the
need for tax planning in the process. It helps the couple and the planner
decide whether the estate is less than $1 million, between $1 million and $2
million, or above the $2 million threshold. It may also isolate the need for
generation-skipping planning.
2. If you die before your spouse, do you want to leave your estate to
your spouse with no strings attached? This question introduces additional
spouse issues.
3. Who should administer your estate? This question introduces the
importance of the personal representative or executor.
4. What specific items of property would you like to leave to specific
individuals? This question asks the client to focus on personal and
sentimental items that have accumulated over a lifetime. These should not be
neglected in the planning process.
5. Do you want to leave anything to charity?
6. Do you want to avoid probate? The answer to this question is not
as obvious as it may seem. The couple needs to understand the benefits of
avoiding probate, and the burdens that must be undertaken in order to avoid
probate. The use of the living trust needs to be discussed as part of this
question. Numerous factors bear upon the answer to this question, including the
probate practices of the particular state in which the couple resides.
7. Are your financial records complete and located where they can be
found and used by your personal representative? This question encourages
the couple to organize their important documents and affairs to make the
personal representative's job easier if there is an untimely death.
8. Do you want to include any special, personal statements in your will?
9. Do you want your organs to be available for research or
transplantation following your death?
10. If you are terminally ill and will die momentarily unless you are
given life support procedures, would you like to have those life support
procedures withheld?
11. Who should manage your financial affairs if you become disabled?
This question introduces the concept of the durable power of attorney. The
client should understand that there are different types of durable powers of
attorney, such as the effective immediately type and the springing power type.
Also, a living trust may be used to help deal with the issue of disability.
12. If your entire family dies in a common disaster, who should the
estate pass to? This question only applies to younger families who could
die in a common disaster. As the children grow and leave the nest, the
possibility of a common disaster is substantially reduced.
13. If both of you ( the parents ) die, would
you like to have your estate left to your children in a common fund, or in
separate shares for each child? This question is really directed to
families who have minor children or children who are not capable of handling
their inheritance.
14. At what age (or ages) should your children receive their inheritance
outright?
15. Who do you want to serve as trustee of the trust established for your
children?
16. Who should be the guardian of your minor children if both of you die?
We will have performed a useful service by introducing these basic sixteen
questions to a client very early in the process. By doing this, we focus the
client on the important decisions and, if nothing more, save wasteful legal
fees that otherwise would accumulate as the lawyer watches the client think
through these basic decisions.
520.884.7550
jpw@financial-architects.com
2311 E. Broadway