Estate Plan Essentials

No matter how much money a person has, estate planning is an act of concern for loved ones. Tom W. Abendroth, partner and deputy leader of Chicago-based Schiff Hardin’s estate planning and administration practice group, works with many high-income clients, but notes that there is one critical rule of estate planning for everyone: Make an estate plan that starts with a detailed and legally drawn will, then review that plan every five years or whenever there is a life-changing event.

Major life-changing events include divorce, inheritance, death of a spouse, remarriage, or when a spouse or a family member needs a plan to deal with health-care issues after becoming seriously ill—any event that significantly changes someone’s net worth.

“Most high-income individuals tend to have some sort of planning in place, including revocable trusts and other vehicles to meet their needs,” says Abendroth. “The issue is, when was the last time they looked at it? An estate plan is a living thing that changes over time, and that’s a given for everybody.”

Like Abendroth, Karen K. MacKay, partner and senior member of the private client services group of Burke, Warren, MacKay & Serritella, is often asked if the current debate over the estate tax in Washington, D.C., affects her thinking and planning for clients. For now, the answer is no.

“Our clients are interested,” she says, “but I think most clients are moving ahead to structure their estate plans to take advantage of the current system.” She advises higher net-worth clients to always think in terms of transferring wealth to heirs or charitable recipients during the client’s lifetime—no matter what the estate tax outlook is. “If an estate plan is properly formulated, depending on an individual’s or couple’s situation, the situation in Washington [D.C.,] shouldn’t have much of an effect.”

An experienced estate attorney is an important part of the development of any estate plan, even if all they do is help a client draft a will. But good estate attorneys might also provide clients with referrals to competent financial advisors, such as accountants and financial planners, that can help them better plan all their money issues.