The Greatest Gift You Can Give - An Estate Plan

“The greatest gift my mother ever gave me was doing her estate plan.”

This was a recent quote from a client.  Truer words were never said.  However, it should be added that the estate was well thought out by her mother and her mother’s attorney, was clear and well written, and that her mother’s assets were coordinated with her estate planning documents.

Another recent client came to me after his wife had died.  He hesitantly told me that before her death, that he had prepared basic Wills and other documents from a legal website, where he paid less than $100 for the documents.  He realized that this was a cheap, quick alternative and now that his wife had died, he needed to do his estate plan in the right way.  There were two serious (and potentially very costly) flaws in the on-line estate plan: (1) There was no provision to save estate taxes.  Hence, upon my client’s death, it is probable that his children would pay hundreds of thousands of dollars of estate taxes.  If their estate plan had been prepared correctly, these taxes would not be paid.  (2) The beneficiary of their life insurance and retirement plans was not changed.  Therefore, if both the husband and wife had died, their minor children would have directly inherited the money from the life insurance proceeds and the retirements assets.  Not only would they have had complete and unfettered access to the money at age 18 (which could be a potential disaster), before the minor children had reached the age of 18, the court would have had complete and full control over the investment and expenditure of the proceeds, requiring annual accountings.  These problems could have been avoided by coordinating the beneficiary designations with the estate planning documents, something that the on-line legal websites are incapable of doing.

The lesson: Estate planning is clearly a gift that you give to your loved ones.  But it should be a thoughtful, complete, comprehensive gift, that takes more time than just filling out an on-line questionnaire and requires the advice and experience of a seasoned estate planning attorney.  Moreover, estate planning is an evolutionary process, which changes over time, where assets and documents must be coordinated, and where considerations and documents change as laws and life situations change.

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