KEYTLaw » Estate Planning

Estate Planning is a Vital Dialogue

On the Net — Tue, 09 Mar 2010 15:17:18 +0000

thespectrum.com: “Discussions with parents or other family members regarding estate planning can at times be difficult, emotional and stressful. This discomfort, however, cannot compare to the financial pain felt by family members whose parents die without having implemented estate planning strategies. Relying upon state governments to decide the management and distribution of our assets and property can be an unsettling experience. Probate costs and the time delays associated with municipal court systems may leave heirs financially unstable.”

Getting Started On Your Estate Plan

On the Net — Tue, 09 Mar 2010 15:14:17 +0000

Investopedia: “Estate planning is more than simply having a will. It is a continuous planning process done to alleviate the financial impact of your death on those you leave behind. By spending just a few hours and dollars now, you can save your loved ones or beneficiaries from paying as much as a 55% estate tax. But a well-constructed estate plan may not only reduce the tax bill, but also help your loved ones understand, resolve and prepare for many of the issues that arise when settling an estate. We’ll show you where to start.”

Estate Tax Repeal in 2010 (or not) & What It Means for CPAs & Their Clients

On the Net — Tue, 09 Mar 2010 02:58:45 +0000

The failure of Congress to deal with the repeal of the federal estate tax before 2010 and the impact of new estate taxes and generation-skipping taxes beginning January 1, 2011, has created great uncertainty and confusion for wealthy Americans and their tax advisers. A 51 page article entitled “Estate Planning In Uncertain Times: The Impact of the Repeal of the Estate Tax and What You Need to Know.” summarizes the major affects and issues that arise from the estate tax repeal (or not). The article starts by saying:

This white paper on the impact on estate planning of the failure of Congress to either temporarily or permanently retain the federal estate and generation-skipping transfer taxes in 2010 was prepared by the Private Wealth Services Group of McGuireWoods LLP, an international law firm . . . . The 2010 Estate Tax Earthquake . . . Because Congress did not act in 2009 to preserve the federal estate and generation-skipping transfer (“GST”) taxes in 2010, the federal estate, gift, and GST taxes, which are sometimes collectively referred to as transfer taxes, have changed greatly from what they were in 2009.

Here’s the table of contents:

The Current Uncertain Estate Tax Environment
How the Estate Tax Was Repealed
The Constitutionality of Retroactive Tax Legislation
The Need to Review Current Estate Planning Documents
GST Tax Planning
State Law Issues
Carryover Basis
Maintaining Flexibility in Irrevocable Documents to Address the Changing Landscape
International Estate Planning Implications

Americans Lack Basic Estate Plans

Richard Keyt — Sat, 06 Mar 2010 01:42:18 +0000

Forbes has a great article called “Americans Lack Basic Estate Plans.” The story claims that despite the national attention given to the Terry Schiavo situation, most people do not have a living will, which is instructions to the healthcare providers that you do not want to be kept alive by artificial means if you are in a terminal condition or brain dead.

3 Estate Planning Changes Coming Your Way

Found on the Internet — Fri, 05 Mar 2010 15:10:29 +0000

Yahoo Finance: “Given the relatively low interest rates and transfer tax values, and some Uncle Sam-sanctioned planning techniques, there is a window of golden opportunity, according to Steve Leimberg, the publisher of Leimberg Information Services Inc. and author of “Tools and Techniques of Estate Planning.” The article discusses three estate planning concepts called tax basis consistency, valuation discounts and grantor retained annuity trusts (GRATs).

Estate Planning as a Family Conversation

Found on the Internet — Fri, 05 Mar 2010 14:55:59 +0000

New York Times: “For many people, estate planning is both a private matter and a morbid topic — not something that parents and their adult children want to discuss. While having these conversations takes a lot of courage, they can help avoid surprises, lead to better financial planning and promote family harmony.”

Survey Reveals Drop in Estate Planning, Wills & Trusts

Richard Keyt — Sat, 27 Feb 2010 18:09:31 +0000

As an estate planning attorney, I often wonder and am asked what percentage of Americans have an estate plan? Law.com conducted a national survey that answers the question. Here are some of the findings of the survey:

35% have a will, down from 45% in 2007
18% have a trust, down from 31% in 2007
29% have a power of attorney (financial or healthcare), down from 46% in 2007

The biggest reason given for ignoring estate planning was the downturn in the economy. People are more concerned about spending money on more immediate needs. Here is the bottom line from the article:

“There’s a disconnect between public perception of the cost and complexity of creating estate planning documents and the straightforward, affordable choices that are out there for consumers looking to equip themselves with a will and estate plan,”

Reasons cited for not having an estate plan were:

not enough assets (ignores problems for loved ones if person becomes incapacited or if parents die with minor children)
do not like to think about death or incapacity (who does, but when people ignore these facts of life, it’s their loved ones that suffer)
belief everything will be ok if they die (I call this the head in the sand, ignore my loved ones approach)
not aware of wills, trusts and related estate planning documents

Yes, these are difficult times. Yes sometimes people just do not have the money to purchase a comprehensive estate plan. Nevertheless, it is always the family and loved ones that suffer.after a death or incapacity. I give a free 1.5 hour class the first Tuesday of every month called Estate Planning 101 during which I explain what is a will, a trust, a living will, a healthcare power of attorney, a financial power of attorney, why these documents are important and how they protect family and loved ones. At the beginning of the class I tell people that people frequently hire me to advise them with respect to asset protection and I ask people what is their most important asset that needs protection? Most of the time, people name tangible things like a home, investment real estate or a business. A few people will give what almost everybody agrees is the right answer – their family.

Estate planning is a form of asset protection for family and loved ones. Without a comprehensive estate plan, your family and loved ones may have to spend thousands of dollars that could have been avoided with a good estate plan and they may suffer emotional trauma that could have be eliminated or reduced with proper planning. In Arizona, the cost to obtain a court order naming a spouse as the conservator of the assets of an incapacitated spouse can be thousands of dollars in attorneys fees and court costs and it may take much too long to obtain the order. The cost of a probate can exceed the cost of a good estate plan. Do you really want to leave your family unprotected? It’s your family that will suffer if you were to die or become incapacitated.

Forbes has an article on the Law.com survey called “Americans Lack Basic Estate Plans.” For more on estate planning, see my Estate Planning Library.

Cars Can Drive Estate Planning

Found on the Internet — Fri, 26 Feb 2010 17:21:41 +0000

Financial Planning: “When it comes to estate planning many advisors forget to talk about a client’s cars. . . . ‘This is an area people forget about when it comes to estate planning,’ says Kevin Transue, a certified financial planner with Heacock Financial, . . . . ‘The collectors don’t even tell their spouses what they paid for the car. Nobody out there is talking about it or planning for it, so what typically happens is the cars sell at auctions, where they get bottom dollar and pay sellers’ fees’.”

Your Parents’ Estate Plan Part 1: Why You Need to Know

Found on the Internet — Mon, 22 Feb 2010 21:29:18 +0000

mndnet: “Your estate plan can make your heirs’ lives easier. But it is your parents’ estate planning that will make your life easier. You or your siblings will probably have to settle the estate and potentially have to go to court to resolve matters. Good intentions don’t count if they aren’t documented legally.

10 Things to Do for Your Family Before You Die

Found on the Internet — Sat, 20 Feb 2010 15:15:22 +0000

Coshocton Tribune: “Think of this as a legal bucket list to help your loved ones after you die. Here are 10 things to get done before you pass on to the hereafter. . . . [Funeral directors] will tell you that too often grieving families are faced with tough choices because their loved one didn’t plan ahead. ‘It is such a relief for the kids when the arrangements are already made,’ . . . . ‘the thing they say to us most often is I’m really glad mom or dad did this. I’m really glad they took the time and made these decisions, because frankly I wouldn’t have known what they wanted or I would have chosen the wrong thing’.”