What is "Planning?"
The key word is "plan." The process does not just consist of moves to avoid or reduce estate taxes, in fact, most people will not have an estate large enough to pay any estate taxes. It consists of identifying goals and desires, detecting pitfalls, and working toward a continuation of your loved ones' lives as much as possible after you depart.
People also often forget that a "plan" should be made for disabilities - and not just mental disability from age -, but also physical disability where unexpected illness or accident causes a loss of abilities.
Subject areas for consideration:
- A paramount consideration (if you have children) is appointing someone to take care of them in the event both parents are deceased.
- The children also need financial stability in the event both parents are gone. This is done in most cases by naming a trustee to maintain the property for the children to some age, often after college age.
- One step beyond that is planning for adult children and grandchildren. If one of your adult children die, do you want that child's share to be maintained in a trust for that child's children, your grandchildren?
- When considering plans for children and grandchildren, it is often necessary to consider a former spouse, for after all, if your property went to a minor child, the former spouse could gain control of the property, and in those cases a family member trustee is in order.
- Possible separations are important. Please keep in mind that planning is planning for all possible events, and one of those events could be death of one of your children, or a divorce, at a time when you are no longer able to change anything.
- After planning for the benefit of future generations, you and your spouse need to consider the immediate needs of planning for each other. Property issues will be dealt with later. You need to appoint each other using powers of attorney (POA).
- One common POA is a durable business power of attorney. This empowers each spouse (or someone else) to handle business affairs, checking accounts, etc.
- The Durable Power of Attorney for Health Care is very important. Spouses appoint each other or someone else to make health care decisions. An alternate is usually appointed also. The common automobile wreck is an obvious example of when an alternate would be important.
- Finally, a Living Will is a usual document executed at the same time as wills.
- Next, one must consider who is to receive what. The basic, obvious, and most common plan is for everything to go to the other of the spouses, then to the children in equal shares. Those considerations mentioned above can affect how this is accomplished.
- The final consideration in planning is the lessening of estate taxes. The Probate Court is not involved in examining estate tax ramifications, except in cases where estate planning is being recommended for minors or incapacitated adults.
This is a very simplified overview of the planning process. On the individual pages of this web site will be much more detail in many of these areas.
