Estate Planning Threat Assessment
Updated: Nov 24, 2020
Poor estate planning, or no estate planning, is a recipe for disaster. Take a look at Jimi Hendrix for example. He died intestate (without a will) with $20,000 in the bank and owing back taxes and other debts, but his estate is now valued over $175 million. The legal battle began shortly after his death in 1970 and is still raging in the courts.
Most of us aren’t going to have an estate like Jimi Hendrix, but what we do have, we want to thoughtfully transfer to exactly the right people and in exactly the way WE want. Getting the documents in place is the first step, but knowing what the likely issues are is akin to a boxer anticipating and then preventing every punch thrown.
Here are some "punches" that frequently come up, that we can avoid through good planning:
According to a TF Wealth survey of over 100 estate planning professionals, family conflict is the number one risk to a peaceful inheritance. If children are treated differently under the estate plan, there is often an assumption that a mistake was made in drafting the documents or that someone has exerted undue influence on the parent. While this may not be the case, without any guidance from you, family members can begin to think the worst of each other.
Sloppy or No Estate Planning
If you have not done any estate planning or if what you have done is outdated or not effective, your assets will be subject to Utah's intestate laws. These laws predetermine who will inherit your assets and in what proportion. Your estate division will be of public record and will go through probate, with all of its costs and delays.
In order to ensure that your wishes are being carried out and safe from the ever-present dangers, it is important that you know what a successful estate plan looks like.
No (or Little) Family Conflict
The goal here is for there to be no surprises. If you are choosing to treat children or other family members differently, be open and honest about it. You may even want to discuss this with your family while you’re alive so that they aren’t surprised later. Even if you choose to not have such a conversation, it’s important to discuss your plan and reasons with your attorney, so that the plan can be customized to carry out your wishes.
Eliminate (or Minimize) Costs and Taxes
Watching inheritance get whittled away by taxes and fees will only lead to frustration and hard feelings. When preparing your estate plan, your intent is to benefit your loved ones, not the government. Working with an estate planning attorney can help ensure that your assets are being handled in such a way that the administrative costs of your passing and any income or estate tax are minimized or avoided.
A Chosen Representative
It is possible that, later in life, you may not be able to handle all of your affairs yourself and may require some assistance from a loved one, whether it be with your finances or healthcare. Look for someone you trust who understands you and your desires. Don’t assume that everyone knows who you want to be in charge, or that everyone knows what your wishes are. You can take care of most of this if you’ve granted proper authority using a, health care directive, power of attorney, a trust, and a will.
Ensure that Everyone Gets What You Want
I love to eat, and I have a few (ok maybe a lot) of favorite restaurants. Have you ever eaten at your favorite restaurant, then gotten sick, and sworn off that place even though you have eaten there dozens of times? I know I have. That is the “legacy” that restaurant left for me. Your assets may be, or may in some way, represent your legacy. Don’t tarnish that legacy by making the last experience with it awful for your family while they try and figure out what should be done. Take some time to think about what you are going to share with your family and friends. To ensure that your legacy is passed on in a meaningful way, consider including an explanation as to why someone is receiving a particular inheritance.
Documents Are Up-to-Date
I have a painting, that my father gave me, of George Washington in a British uniform. I love it because it really shows how drastically and quickly life can change. It is important that you review your estate planning documents with each life change (i.e. birth or death of a family member, purchase or sale of a major asset, change in health, marriage or divorce, etc.). It is also important that we stay in touch. Contact me when these major life changes occur and I will contact you when there are changes in the law. This will help ensure that your documents stay effective and your wishes are carried out.
So do the groundwork that a little planning requires, and let's figure out what "punches" might be coming your way!
I am a concierge attorney in Utah. What does that mean? It means:
(1) You can contact me on my cell phone, and I will be the person you interact with-not a paralegal or secretary.
(2) I come to you. All of our meetings will be at your home or other place of your choosing. Wherever you are most comfortable.
(3) I customize each estate plan to ensure it does exactly what YOU want it to.
Give me a call or text today, and let me show you what it feels like to be your attorney’s top priority.