Friday, March 21, 2014

Introduction to Estate Planning: A Course for Consumers Chapter 3

Chapter 3: Identifying Goals and Objectives

In Chapter 2 we discussed how the process of estate planning works. In this Chapter 3, we explore how to identify goals and objectives that drive the estate planning process. As an estate planning attorney, the process of goal identification is critical to assisting clients in moving forward with their estate plan.

With each estate plan individualized to each client, understanding what each client intends to accomplish is critical. Many people say, "I know I need a Will", but when asked why, very few can actually identify any real reasons. The reason to deal with estate planning specialists is to have qualified guidance in understanding why you are doing any part of the estate plan.

Let's start with goals that many clients seem to share. As your read through the list, ask yourself if any of the items listed are important to you. As you begin to identify your estate planning goals and objectives, you are searching for what is important to you and your family.

1. I want to protect my spouse if I get sick or die.

2. I want my estate to go to my spouse and then to my children.

3. I want my family to face the smallest amount of costs with my estate.

4. I want to save taxes.

5. I want to avoid probate.

6. I want my estate to pass free of Court involvement or supervision.

7. I don't my spouse's next spouse to get my money.

8. I want the inheritance I leave to my children to last for them and not be taken in a divorce or their creditors.

9. I want to know who will raise my children if I am not here.

As you read that list did any of those items sound like something you would say? Remember, identifying your goals and objectives is about what is important to you. Here are examples of other goals clients will mention:

1. I have a disabled child and want to make sure they are provided for.

2. I am taking care of a disabled parent. How can I protect them.

3. I want to pass my business interest to one child but not short change my other children.

4. How do I minimize estate taxes?

5. I want a Will.

As you can see, goals can be as creative and as numerous as there are people. Bear in mind that the purpose of this chapter is not to tell what you goals should be. The purpose of this chapter is to start you thinking about what your goals are.

Here are some exercises you can do to help you focus in on what is important to you:

1. Pretend that you either died or became disabled yesterday. I suggest yesterday because it can't happen and it will help you focus your thinking.

As you think about that, think about how you want things to work, who you want to protect and what you would want your situation to look like in that event. Then start writing all the things that pop into your mind. As you write that list, you start to identify the things that are important to you. This list becomes your starting point with your own estate plan.

Your list is yours alone and that is why your estate plan is yours alone. Your list of goals and objectives is what your estate planning attorney will use to guide you in designing and building your own estate plan.

As you think about your situation, do you have things on your list that are not covered here? That's great and you are on your way to starting your estate plan. If you would like to share a goal not listed here, that could help others that read this in their own thinking.

In Chapter 4 we will cover how your estate planning attorney uses your list of goals to begin the process of designing your estate plan. The first step is to understand the components of every estate plan and that is where Chapter 4 starts, with The Components of Every Estate Plan.

Thank you for your questions and comments. We appreciate each and every one and look forward to any you have about this Chapter 3 of Estate Planning: A Course for Consumers.

Bernie Greenberg

Friday, March 7, 2014

Introduction to Estate Planning: A Course for Consumers Chapter 2

Chapter 2: What is Estate Planning?

In this consumer level course on estate planning, we are covering different facets of estate planning. In Chapter 1, we introduced this course and series. Here in Chapter 2, we will explore what estate planning is and why it is important to you.

What is estate planning? A process.

Estate planning is a process. It's really that simple. Estate planning is a guided process (guided by a professional who specializes in estate planning) of ordering your assets and property and creating certain legal documents that will bring about certain results in the future, all according to your goals and directions.

While this sounds simple, because every family is different, the process and the specific components of each estate plan will vary, sometimes greatly. More on this below. The estate planning process may include the following:

1. Titling of assets or the rearranging of titles.

2. Establishing of beneficiary designations or amending existing beneficiary designations on insurance policies, IRA's or other types of investments.

3. Creation of a Will.

4. Creation of Durable Powers of Attorney.

5. Creation of Health Care Powers of Attorney or what is also sometimes called a Health Care or Medical Directive.

6. Creation of a Living Will.

7. The consideration of trusts which may lead to the creation of one or more trusts. When trusts are considered an analysis of probate issues also occurs.

8. Tax planning. In estate planning, we consider the following types of tax planning: income tax planning; gift tax planning; and estate tax planning. This may also involve consideration of a tax many people have not heard of knows as the generation skipping transfer tax.

9. Planning for special situation and needs. Examples of this include: planning for parents who live with you or planning for a child or other relative with special needs or disabilities.

Because every client's situation is different, the process not only looks different from one client to the next, but the list of documents from one client to the next is also different. Due to these differences, it is critical that you work with a qualified professional who specializes in estate planning who can guide you through your own estate planning process.

Each of the nine items listed above will be covered in separate chapters in this estate planning course for consumers. Remember, that not all of the nine will apply to everyone. There are certain elements or components that do apply to each estate plan. In a future chapter of this course, we will cover the Basic Components of Every Estate Plan.

If each estate plan, by definition, is individualized, and each client's estate planning process is different, where does anyone begin? The starting point is to identify each client's goals and objectives. That is the purpose of our next chapter, identifying estate planning goals. We will cover goals that clients will routinely identify and how you create a list of your own goals and objectives.

Let us know if you have questions about this course in estate planning and if you would like to see any other topics covered as we proceed through the course. Thank you.

Bernie Greenberg