Monday, December 5, 2011

FAQ About Estate Planning

Frequently Asked Questions About Estate Planning

We are always taking questions about estate planning here at our firm, and also do so on social sites like facebook; Google+; twitter and linkedin. You can connect with us there by clicking on the Contact Us tab above. From time to time, I like to publish some of the recent questions I have received so you can review them and determine if the information is helpful for you. Here are several recent questions and answers:

1. What is estate planning?

Estate planning is a catch all phrase that refers to legal arrangements you can make, either through legal documents such as a Will, or to contract arrangements you can make such as beneficiary designations on accounts or property. The planning portion of the phrase refers to a thoughtful analysis of your situation, needs, assets and goals to develop and implement a plan that is customized for you that involves both the legal and title arrangements.

There is no such thing as a "one size fits all" estate plan. Everyone's situation is different making their estate plan different as well.


2. Do I need an estate plan?

This is one of the most frequent questions I hear. The answer is, "it depends". Now, that's not a typical lawyer answer at all. It really does depend and it requires what I refer to in the first answer above: a thoughtful analysis of your situation, needs, assets and goals. Without this (we call this an estate planning assessment)it is not possible to provide each person with proper answer.

By doing the analysis one client at a time proper recommendations about the specific estate planning necessary to accomplish a client's goals can be given. So, to answer this question, ask yourself some questions. If you answer yes to any of these, then you should consider having an estate plan. Ask yourself:

1) Do you have minor children or a disabled child?
2) Do you care who makes decisions for you if you are incapacitated or controls your estate if you die?
3) Do you care where your assets go if you died suddenly in an accident?
4) Do have life insurance and other investments?
5) Is your property in more than state, or does it consist of operating businesses or farm or ranch property?
6) Are you concerned about keeping assets and estate private?
7) Is your estate near or over the estate tax exemption?
8) Are you concerned with protecting family property from future creditors?

There are other circumstances any client may have that would give rise to a need for estate planning, but a good place to start is those 8 questions. If you can answer any of them with a "yes" then you should schedule an estate planning assessment for yourself.

3. Since the estate tax exemption is so high, I don't need to do anything right?

Unfortunately, this is wrong. The level of the estate tax exemption keeps changing as Congress has decided (for whatever reason) to use the estate tax exemption as part of a political game. In fact, the current exemption may only be in place for 2011 as a new proposal to decrease it starting in 2012 was introduced just last week in Congress.

Relying on the government or Congress to do your estate plan for you is a risky proposition and we don't recommend it to any clients. A good rule of thumb to remember is: what the Congress gives one year can be taken away the next. With the frequency of changes to the estate tax laws coming from Washington, we recommend that clients focus on estate planning arrangements that will be workable for their family regardless of that Congress does. This is not always easy to accomplish for all clients and does require that thoughtful analysis I refer to above.

If you have a question that you would like our input on, don't hesitate to give me a call at 303-730-7100, send me an email, or just make a comment here. I hope you join our conversation and we look forward to hearing from you. Thank you for your interest.

Bernie Greenberg

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