The goal of an estate plan is to avoid the probate process or litigating ambiguities in court. The litigation costs will substantially decrease the value of your estate, thus reducing the amount to your beneficiaries.
What Makes Up An Estate Plan?
A comprehensive estate plan includes a revocable trust, a pour-over will, a power of attorney for health care decisions, a power of attorney for financial decisions, and proper trust funding. Be wary of cheap, boilerplate estate plans or plans that are limited to just a will or just a trust.
A well-established estate plan starts with a true understanding each client’s background, which includes information about their job, education, saving and spending habits, their wealth goals, and their gifting patterns. But, for the plan to work, knowledge of each beneficiary’s sophistication and maturity is paramount.
Know Your Beneficiaries
If every beneficiary is disciplined, motivated and hard working, then an outright distribution is warranted. However, not all beneficiaries are created equal. If you have a beneficiary who struggles financially, or with addiction, or simply lacks motivation, an outright gift could enable the behavior—spelling disaster.
Who Will Manage the Estate?
Careful thought should be given to who will manage the estate. This decision requires a separation of your emotions from pragmatics of fulfilling your wishes. Often, the oldest child is not qualified. Yet, the oldest is named as trustee for emotional reasons when the youngest child is a better financial manager.
Who Will Make Your Medical Decisions?
Another area of concern is who will make your medical decisions if you cannot. If your health care decision includes “pulling the plug,” appointing someone you know is emotional could lead to devastating effects. Ask yourself, will this person agonize over your request to pull the plug or if this person fulfills my wishes to pull the plug will they spend the rest of their life feeling guilty?
We Can Help
A well-established plan is more than dollars and cents. It also requires skill in understanding the potential pitfalls both emotionally and financially. Because the Perryman Law Firm litigates deficient estate plans, we have an added advantage. We know the outcome of the various heavily litigated issues and we use that knowledge to advise you on how to plan to avoid litigation.
If you have not established an estate plan or if you have questions about your existing estate plan, please contact the Perryman Law Firm and let us help guide your decisions.
noun | /'streŋ(k)th, 'stren(t)th/ | [strength]
The quality or state of being strong, capacity for exertion or endurance.