Wisely, you’re doing the serious work of creating or periodically revising that profound “estate plan you can live with,” whether it’s yours or a loved one’s. You’ve invested lots of heart and soul over the last month or so, thinking of and about the issues, and then deciding about how they’re to be directed in the plan. It’s been challenging. Nice going! You deserve to feel good about it.
So, now what?
Start building the plan.
“Gary, I know something about all this, I’m pretty sharp, and I can absorb all the smarts from all the resources. Even so, I’d be a fool to think I can structure and document a solid, reliable, comprehensive plan.”
Absolutely right – unless you own and owe almost nothing, are entitled to no benefits, and care about no one.
This business is so ponderous, subject to countless and minutely detailed technical, legal and tax factors that only the professional team can master. Besides, there are the family’s unique dynamics. It needs the professional team.
You’re ready now to tell the team what you want. But don’t call them, yet. I think the better prepared you are to work with the team, the better and less expensive the product will be and the more comfortable you’ll feel.
Knowledge of the basics abounds. Firms in the business happily offer infomercial guidebooks and seminars about their specialties. The Internet overflows with information of every kind, including official state websites proclaiming law, procedures and documentary requirements. On the web also are cyber-versions of those infomercials and more. Educational institutions offer community-outreach courses. Book vendors, public libraries and resources like my three draft minibooks that this column is excerpted and adapted from are available.
Let’s offer you a refresher-primer about the team, what they do, and the forms of property ownership and succession that they’ll be telling you about and fashioning into your plan.
The professional team
You’ll probably not need all the ones listed here. Select the ones you need to suit your case. Some might already be on your living-life professional team. Charisma and empathy are vital, too. They even can suggest desirable improvements to your decisions.
Will it be expensive? Sure, but in the end well worth it, the same reasoning that you apply to choosing a neurosurgeon – to do the intricate, serious job right and trouble-free. Imperfect work eventually costs more in both heartache and money.
The team collaborates to arrange your world into the best designs to carry out your objectives effectively, expediently, tax and expense economically, and legally unassailably, for you and your legatees. Their core tools are the titling (ownership) of your assets, the timing and the means of transferring them, and the recipients to transfer them to. You hear some of their methods referred to as “third-party ownership.”
Here’s a refresher on the most common titling tools:
Remembering that you’d rather suffer the plague than probate, or income and death taxes either. The strategy also is to title assets so that they aren’t includible in, or subsequently attributed to, the probate or tax estate. “Includible” and “attributed” invoke the bottomless black hole of regulations and statute and case law that the attorneys and the tax authorities duel about, in their endless game of “gotcha!”
Did you know that someone else can own the life insurance policies on your life, thus avoiding death taxes on the proceeds? But, regardless of ownership, always beneficiary the insurance so that the death proceeds never will fall into your probate or tax estate for lack of a living named beneficiary, unless you deliberately want them to for the purposes of providing the estate’s liquidity needs.
Other trusts own and distribute life insurance proceeds, manage assets after death, exist to avoid death and income taxes for one or more family generations, to shepherd philanthropic interests, and serve countless other purposes.
OK, if you don’t feel quite ready to make that call yet, hopefully you will after we explore the final product, the documents themselves, next time. Stay tuned.