In a nutshell, smart estate planning involves more than a will: it takes into account a realistic assessment of net worth, intelligent use of the marital deduction, and gift-giving programs that can reduce future taxes. It should also include trusts that will keep estates out of probate and the use of other trusts to minimize or avoid taxes.
Beyond being familiar with the laws that comprise estate planning, the following are just a few basic tips to ensure a comprehensive estate plan is put into place and, hopefully, once the plan is activated, smooth the entire process.
Communication Is Crucial.
Wills are touchy things, and leaving money to heirs is sure to cause hurt feelings — or worse. Stressing to the client that communication is a necessary evil — hopefully the client's heirs will have a long time to get used to the asset distribution plan — is of paramount import. It won't lessen the impact, but it may allow the client to share his or her thinking with the heirs before he or she is gone.
Beneficiaries Should Be Reassessed Regularly.
The one certainty in life (well, other than death and taxes) is that things change. Many of a client's financial assets will allow designation of a beneficiary and a contingent beneficiary. Beneficiary designations supersede any provisions made in a will, and it's not uncommon to see assets go to the "wrong" beneficiary when family situations change. These changes might include children born after the initial plan was made or divorce followed by remarriage.
Choose Your Personal Representative Carefully.
Whenever I first meet with a client, the one thing I always make sure to stress is that he or she take the time to consider very carefully who should be the personal representative of his or her estate. The best person may be someone who is not a family member but a trusted friend, advisor, or corporate fiduciary who has no ulterior motive and a better understanding of financial matters. It is imperative that the personal representative is someone who will be fair, knowledgeable, and free of conflicts of interest.
Make an Adequate Cash Position Part of the Estate.
Those pesky final expenses after the client has passed are often a bone of contention to the heirs, especially if they have to contribute cash out of pocket to pay for them before the estate has been disbursed. It's not always easy to know how much of the client's estate to keep in liquid investments or cash, but a good amount should be earmarked for those final expenses.
Get the Client to Keep Good Records.
Obviously, the executor and heirs will need to know where the estate assets are located, and I can't tell you how often the client hasn't passed on the current information. Getting your client to maintain an orderly and up-to-date record of all bank accounts, insurance policies, investments, retirement plans, etc., will make your life immeasurably easier when the time comes to enact the estate plan.
Estate planning is vital to any person with assets. Only an attorney who is knowledgeable about the field and understands the pitfalls to avoid can truly create an estate plan that will give the client peace of mind.
About the Author
Seth Marmor, partner in Shapiro, Blasi, Wasserman & Gora, P.A., is one of only six lawyers in the state of Florida who are board certified by the Florida bar in elder law and wills, trusts, and estates. He is "AV" rated by Martindale-Hubbell — the highest possible rating — and was selected as a Florida Super Lawyer in Super Lawyers magazine in both 2006 and 2007. For more information, visit www.sbwlawfirm.com.
