HOW TO PLAN YOUR ESTATE (INTRO Q&A)
What is estate planning?
My educational approach to estate planning focuses on these five objectives:
What documents do I need?
The essential documents of any estate plan include:
Other common documents include:
Do I need an attorney?
Yes, an estate planning attorney. Perhaps you are tempted to do your own estate plan as a do-it-yourself project. You could buy some software that purports to produce “attorney-drafted documents good in all 50 states.” You might even follow its directions carefully and produce a decent result. However, use of a computer program will be successful only if (1) the program supplies the options you need, and (2) you understand the options well enough to choose the best one (or notice the best one is missing). If you are not familiar with the methodology and mathematical processes in formulating an estate plan, there will be no way to know if the software produced a realistic and appropriate result. Generally, the saying, “He who has self for an attorney has a fool for a client” applies in the area of estate planning.
I recognize that many people are not persuaded by the above argument (no matter how correct it is), so here is the longer version if you're still tempted by LegalZoom advertisements or Suze Orman books:
4 Reasons You Should Hire an Estate Planning Attorney to Prepare Your Estate Plan
Are you sure? My situation is different.
So often I speak with people who view their own situation in the extreme. Many tell me how simple their estate plan is going to be; they prefer to copy form documents because they don’t have much money and all their children are responsible adults. Others share how unusual they think their situation is. They might have several divorces, stepchildren, drug-addicted relatives, black sheep, IRS tax problems, oil and gas interests, or unusual medical conditions.
In most cases, both are false assumptions. The first group fails to understand the various problems that may occur when they fail to do comprehensive planning. The second group somehow fails to observe that almost every family in America has unusual issues of its own. Your unusual situation is no excuse to procrastinate. An experienced estate planning attorney is likely to have dealt with a situation like yours many times before.
I don't have much. Should I bother using an estate planning attorney?
I had lunch recently with a young businessman who inquired about my law practice. He asked me, "At what point should I consider hiring you as my estate planning attorney rather than simply relying on self-help will preparation software?" What he was really asking was, "How much wealth must I accumulate before the benefits of getting professional counsel outweigh the costs of paying for it?" These are interesting questions. My response was to describe four triggering events, any of which calls for the expertise of an estate planning attorney. Here they are:
I hope that helps you too.
I have a will. Isn't that enough?
Many people sign a Will and nothing more. Unfortunately, the effect of a Will is to facilitate the probate process. A comprehensive estate plan focuses instead on the use of a Living Trust, which is intended to eliminate the need for court involvement in the event of death or extended incapacity.
A comprehensive estate plan also includes planning for tax-advantaged assets (e.g., IRA, 401k, 403b, annuity, cash value life insurance). These assets, which on average comprise a growing percentage of a person's net worth, are governed by beneficiary designations and subject to complex rules. I refer to them as "football assets" because, if not handed off to someone with care, where they bounce to is unpredictable.
An effective estate plan must address how to coordinate these football assets with the assets governed by a Will or Living Trust. If you have retirement accounts, annuities, or cash value life insurance, then you need to get counsel from someone who knows the latest estate planning strategies for dealing with these assets. A simple Will doesn't cut it. Neither does a do-it-yourself software program. Neither does an accountant, financial advisor, or an "estate specialist" they refer you to. Don't get stuck in the tired argument about whether you need a Will or Living Trust. You need an estate planning attorney who will see the big picture of your estate -- and teach you proven strategies that many advisors don't yet have a handle on.
Can't I just make my child joint owner of my assets?
No. This is a very common mistake.
Do you help people outside of Tucson?
Yes. I represent clients throughout the State of Arizona. If you are unable to come to my office, please schedule a phone conference.
And don't be scared off just because my office is not in your neighborhood. Finding the right estate planning attorney for your family is worth the extra effort, even if it requires a longer drive.
Do you help people who live outside of Arizona?
In general, no. However, I do make some exceptions for residents of other states who own property in Arizona.
How is the fee determined?
In order to maintain a logical, consistent, and fair pricing system, most services are priced according to a fixed price schedule. In other words, you will know the cost up-front, before any work begins. The fixed price schedule includes various levels of service. You may choose one tailored to your objectives and budget.
Do you accept credit cards?
Yes, all major credit cards are accepted including American Express.
Do you offer a complimentary Initial Consultation?
I provide free initial consultations to prospective estate planning clients. The usual topics include wills, living trusts, and powers of attorney. The purpose of the free consultation is to become acquainted with each other and decide whether we are a good fit. You will have an opportunity to share your "story" -- tell me what is unique about you and your situation, plus share any concerns you feel that I should know about. I will educate you about your estate planning options and review my fixed fee schedule with you. There is no obligation to proceed.
What should I bring to the first meeting?
Please bring a completed Estate Planning Survey to the Introductory Meeting. If you are not able to complete the Estate Planning Survey prior to the meeting, please come anyway. The Survey is a tool to increase the productivity of our time together and not a prerequisite.
Please bring along copies of the following documents if you have them:
Please bring along photographs of your children or other loved ones who may be included in your estate planning documents.
Is there a recurring annual fee to remain a client?
No. A common approach by estate planning lawyers is to charge an annual fee whether or not changes are actually made. My observation is that most clients are wary of this arrangement because they feel a comprehensive plan eliminates the need for regular changes. To some extent, this feeling is accurate. However, the opposite approach is an invitation to procrastinate, especially when the cost of making a change is unknown.
My solution includes regular invitations to review your estate plan without the costly annual fee, combined with predictable costs to update your existing documents. You are free to schedule a complimentary Review Meeting at any time. If changes are made, a reasonable fixed price is determined, which will include all necessary phone and office conferences to complete the project.
My educational approach to estate planning focuses on these five objectives:
- Fulfill Responsibilities: Make certain that dependent children are taken care of upon death or incapacity of parents.
- Get Organized: Avoid unnecessary costs, delays, and loss of privacy upon death or incapacity.
- Promote Self Control: Protect heirs from "getting too much, too soon."
- Model Good Stewardship: Minimize estate, gift, and income taxes.
- Protect Important Assets: Protect assets from "creditors, predators, in-laws, and out-laws."
What documents do I need?
The essential documents of any estate plan include:
- Last Will and Testament
- Beneficiary designations
- Financial Power of Attorney
- Health Care Power of Attorney
- HIPAA Release Authorization
Other common documents include:
- Revocable Living Trust
- Beneficiary Deed
- Living Will Declaration
- Irrevocable Life Insurance Trust
- IRA Protection Trust
- Limited Liability Company
- Buy-Sell Agreement
Do I need an attorney?
Yes, an estate planning attorney. Perhaps you are tempted to do your own estate plan as a do-it-yourself project. You could buy some software that purports to produce “attorney-drafted documents good in all 50 states.” You might even follow its directions carefully and produce a decent result. However, use of a computer program will be successful only if (1) the program supplies the options you need, and (2) you understand the options well enough to choose the best one (or notice the best one is missing). If you are not familiar with the methodology and mathematical processes in formulating an estate plan, there will be no way to know if the software produced a realistic and appropriate result. Generally, the saying, “He who has self for an attorney has a fool for a client” applies in the area of estate planning.
I recognize that many people are not persuaded by the above argument (no matter how correct it is), so here is the longer version if you're still tempted by LegalZoom advertisements or Suze Orman books:
4 Reasons You Should Hire an Estate Planning Attorney to Prepare Your Estate Plan
Are you sure? My situation is different.
So often I speak with people who view their own situation in the extreme. Many tell me how simple their estate plan is going to be; they prefer to copy form documents because they don’t have much money and all their children are responsible adults. Others share how unusual they think their situation is. They might have several divorces, stepchildren, drug-addicted relatives, black sheep, IRS tax problems, oil and gas interests, or unusual medical conditions.
In most cases, both are false assumptions. The first group fails to understand the various problems that may occur when they fail to do comprehensive planning. The second group somehow fails to observe that almost every family in America has unusual issues of its own. Your unusual situation is no excuse to procrastinate. An experienced estate planning attorney is likely to have dealt with a situation like yours many times before.
I don't have much. Should I bother using an estate planning attorney?
I had lunch recently with a young businessman who inquired about my law practice. He asked me, "At what point should I consider hiring you as my estate planning attorney rather than simply relying on self-help will preparation software?" What he was really asking was, "How much wealth must I accumulate before the benefits of getting professional counsel outweigh the costs of paying for it?" These are interesting questions. My response was to describe four triggering events, any of which calls for the expertise of an estate planning attorney. Here they are:
- When equity in real estate exceeds $100,000
- When cash and non-retirement investments exceed $75,000
- When retirement investments exceed $100,000 per non-spouse beneficiary
- When life insurance death benefits exceed $250,000 per non-spouse beneficiary.
I hope that helps you too.
I have a will. Isn't that enough?
Many people sign a Will and nothing more. Unfortunately, the effect of a Will is to facilitate the probate process. A comprehensive estate plan focuses instead on the use of a Living Trust, which is intended to eliminate the need for court involvement in the event of death or extended incapacity.
A comprehensive estate plan also includes planning for tax-advantaged assets (e.g., IRA, 401k, 403b, annuity, cash value life insurance). These assets, which on average comprise a growing percentage of a person's net worth, are governed by beneficiary designations and subject to complex rules. I refer to them as "football assets" because, if not handed off to someone with care, where they bounce to is unpredictable.
An effective estate plan must address how to coordinate these football assets with the assets governed by a Will or Living Trust. If you have retirement accounts, annuities, or cash value life insurance, then you need to get counsel from someone who knows the latest estate planning strategies for dealing with these assets. A simple Will doesn't cut it. Neither does a do-it-yourself software program. Neither does an accountant, financial advisor, or an "estate specialist" they refer you to. Don't get stuck in the tired argument about whether you need a Will or Living Trust. You need an estate planning attorney who will see the big picture of your estate -- and teach you proven strategies that many advisors don't yet have a handle on.
Can't I just make my child joint owner of my assets?
No. This is a very common mistake.
- Your child no longer has a fiduciary duty to manage the asset in your best interest.
- Making your child a joint owner is an irrevocable gift. You can't change your mind no matter what happens, and you may have to file a gift tax return.
- If you decide to sell the asset, you will need permission from the child.
- You may accidentally disinherit your other children.
- You expose your own assets to the creditors of your child. For example, if your child is at fault in a car accident, the other driver may seek to attach your joint asset as part of the judgment.
- Your child loses the full step-up in tax basis at your death.
Do you help people outside of Tucson?
Yes. I represent clients throughout the State of Arizona. If you are unable to come to my office, please schedule a phone conference.
And don't be scared off just because my office is not in your neighborhood. Finding the right estate planning attorney for your family is worth the extra effort, even if it requires a longer drive.
Do you help people who live outside of Arizona?
In general, no. However, I do make some exceptions for residents of other states who own property in Arizona.
How is the fee determined?
In order to maintain a logical, consistent, and fair pricing system, most services are priced according to a fixed price schedule. In other words, you will know the cost up-front, before any work begins. The fixed price schedule includes various levels of service. You may choose one tailored to your objectives and budget.
Do you accept credit cards?
Yes, all major credit cards are accepted including American Express.
Do you offer a complimentary Initial Consultation?
I provide free initial consultations to prospective estate planning clients. The usual topics include wills, living trusts, and powers of attorney. The purpose of the free consultation is to become acquainted with each other and decide whether we are a good fit. You will have an opportunity to share your "story" -- tell me what is unique about you and your situation, plus share any concerns you feel that I should know about. I will educate you about your estate planning options and review my fixed fee schedule with you. There is no obligation to proceed.
What should I bring to the first meeting?
Please bring a completed Estate Planning Survey to the Introductory Meeting. If you are not able to complete the Estate Planning Survey prior to the meeting, please come anyway. The Survey is a tool to increase the productivity of our time together and not a prerequisite.
Please bring along copies of the following documents if you have them:
- Wills
- Real estate deeds
- Powers of attorney
- Living Wills
- Trust agreements
- Life insurance policy declarations
- Annuity policy declarations
- Recent statements from investment accounts
Please bring along photographs of your children or other loved ones who may be included in your estate planning documents.
Is there a recurring annual fee to remain a client?
No. A common approach by estate planning lawyers is to charge an annual fee whether or not changes are actually made. My observation is that most clients are wary of this arrangement because they feel a comprehensive plan eliminates the need for regular changes. To some extent, this feeling is accurate. However, the opposite approach is an invitation to procrastinate, especially when the cost of making a change is unknown.
My solution includes regular invitations to review your estate plan without the costly annual fee, combined with predictable costs to update your existing documents. You are free to schedule a complimentary Review Meeting at any time. If changes are made, a reasonable fixed price is determined, which will include all necessary phone and office conferences to complete the project.