Do I need a will?
Everyone with any property, real or personal, needs a will, if they care at all who receives their property upon their death.
How much does it cost?
This is just like asking the grocery clerk how much groceries cost before knowing what you are going to buy.
After a one- to two-hour initial meeting, wherein we listen to the client's goals and offer some alternative methods to accomplish their desires, we quote a reasonable fee, in writing, and follow up with a written engagement letter confirming the plan and our fee.
Isn't a “living will” all I need? Why do I need a health care power of attorney?
Many clients feel that the “living will” covers the “typical nursing home situation.” The problem is that the living will only covers terminal situations, or a persistent vegetative state. A living will does not cover a situation where one is not terminal. For situations which are not terminal, a well-drafted health care power of attorney is necessary.
If I am planning to marry and I have at least one child by a prior marriage, what should I do?
Conventional planning for the married couple is based on the premise that the assets are available to the surviving spouse and then the common descendants. A different kind of plan must be considered to protect the interests of family members unrelated to the surviving spouse.
It is advisable that a couple intending to marry discuss the various opportunities and options before marriage.
The main tool to accomplish the parties' objectives is the “marital agreement.” In the typical marital agreement, each spouse gives up specified rights in the assets or income of the other spouse. In return, the spouse giving up the rights is usually promised some sort of payment in the event of a divorce or death. This often involves the use of life insurance.
The problem avoided by the marital agreement is the unplanned concept of “estate planning by coin flip.” The goal is to avoid the passing of property on the death of both spouses in a manner dependent randomly on which of the spouses died last.
What are the advantages and disadvantages of joint tenancy?
Joint tenancy is a convenient form of ownership. It is a form of ownership that has been encouraged in the marketplace by financial institutions and, to some extent, by professional advisors. Joint tenancy, it is estimated, is utilized in 95 percent of married couples' estate plans. Because of the survivorship feature of joint tenancy, it is thought to create an estate plan instantly.
Joint tenancy requires no will, trust or other estate planning device. It does not go through probate court on the death of the first joint tenant. In fact, this has been one of its main selling points: “If there is no probate, owning property jointly must be good.”
However, like anything in life, joint tenancy has its consequences, and therefore, its limitations. Untutored planning with joint tenancy can create income and estate tax pitfalls, even when this planning appears proper.
Favorable Features of Joint Ownership:
- Easy and convenient
- Psychologically pleasing
- Creates a “mini estate plan”
- Not complicated, on the surface
- No gift tax to spouse
- No death tax on death of first spouse
Adverse Features of Joint Ownership:
- Passes property to unintended heirs
- Affords no planning opportunity
- No control
- Excellent for creditors
- Gift tax implications to non-spousal owners
- Death tax created without ownership as to non-spousal owners
- Fifty percent step-up in basis, as opposed to full step-up in basis
How much can I leave my spouse and children without estate taxes, if I die?
The Internal Revenue Code provides that property going to a surviving spouse, by gift or inheritance, passes free of tax, i.e., no limit. Children can receive $14,000 (effective 1-1-2013) each, per year, from each parent and up to $10 million, either by gift or at death.
What is the most overlooked estate planning concept?
No one should leave their property to a spouse, children or other person without the protection afforded by a “spendthrift trust.” A spendthrift trust protects “inherited” property from a person's creditors and can also pass the property free of estate taxes to successive generations, while the inheriting person can still have “control.”