Do I need an estate plan?

December 21, 2017 - Posted by: admin - In category:

taxes - 1

Yes. If you have anyone or anything you care about, you need an estate plan.

Perhaps a more helpful question, then, is what type of estate plan do you need, and why?  There is a good article on Fidelity.com dealing with this very subject and many of the same considerations I would advise my clients to consider. CLICK HERE TO READ THAT ARTICLE.

Among the considerations listed by Fidelity in the context of thinking about your estate planning are the following:

  • Children (minor children, special needs or otherwise) and other intended beneficiaries
  • Size and location of estate (i.e. what assets do you have an where are they found)
  • Retirement account distributions, including the ability of beneficiaries to use IRA stretch options for their inherited accounts
  • the importance of privacy and avoidance of involvement by outsiders
  • charitable giving
  • business succession, including for farms and other agricultural operations
  • different life stages and how your need for and priorities towards estate planning will change over time
  • blended families, disabilities or other unique considerations (let’s face it, every family has “unique” considerations because of personalities and differing challenges)

The Fidelity article then takes up each of those larger categories in some level of detail. You won’t come away from reading that article with a comprehensive view of how to formulate your estate plan, but you will most likely come away with a few questions answered and another list of several other questions you would like to have answered. Hopefully, you also recognize while reading the article just how varied estate plans can and should be from one person to another. Those eight general categories are differently applicable and uniquely emphasized for each person and family. Accordingly, an estate plan should be customized to account for such differing needs and priorities.

While internet resources are great for some things, such as learning about these basic concepts, a wise individual will recognize that for something as important, personal and potentially complex as an estate plan, using an “internet form builder” to choose from a few generic options is not the best way to achieve your ultimate objectives. In the end, estate planning involves things that are nearest and dearest to our hearts–both people and things (in no particular order, depending on the individual…:)).

The title of the Fidelity.com article is: “Do you need an estate plan?” (https://www.fidelity.com/viewpoints/personal-finance/do-you-need-an-estate-plan). It is worth the read to help you begin the thought process necessary to do good estate planning, a/k/a LIFE PLANNING.

Now that I have sung the praises of that article, I will make one critic and correction. On the first page of the article, we find these statements:

Most people with assets or a family should execute a will. However, not everyone needs an estate plan.

While this seems to be splitting hairs, I believe there is an important clarification to be made here. Estate planning includes the use of a Will in most instances, sometimes also with one or more trusts (such as when we use a Pour-Over Will to connect stray assets to a trust). Accordingly, I don’t agree with the assertion that people should choose between using a Will or doing an estate plan. Rather, people should formulate and commission a customized estate plan appropriate for their circumstances and objectives. Such may sometimes be a Will-based plan, which will rely on probate in the future to settle the estate. Or, in many instances, such personalized estate plan will be a trust-based plan that includes a pour-over will to close the loop on stray assets in a worst-case scenario.

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