Death and Taxes: Estate Planning Helps With Both

Successful estate planning is more than tax avoidance or charitable giving. A sound estate plan supports personal hopes and dreams for family, friends, or causes you value.

“Everyone needs an estate plan, particularly if they have young children, to name a guardian and select a trustee to administer assets,” says Carlyn S. McCaffrey, a partner at McDermott Will & Emery.

Update Your Estate Plan Regularly

Don’t put it off, and be sure to update your will regularly.

“Some people prepare a will, set up trusts for their children, and think they’ve done everything perfectly,” says McCaffrey. “But they forget that they designated their 5-year-old child as a contingent beneficiary of their $500,000 IRA. Without planning, the child gets the money—but the court will manage that money for the next 13 years.”

Do It for Your Surviving Spouse, Family Members, and Other Loved Ones

Considering today’s complex regulations, it’s especially important to seek out a knowledgeable lawyer to guide you toward an estate plan you can live with.

Estates regulation is a shifting minefield, says William Schwartz, former dean of Boston Law School and counsel at Cooley in New York. You need informed legal assistance when legislatures consider tax law changes (e.g., estate tax, gift tax, income tax, inheritance tax) and planning options in state law.

Estate lawyers are familiar with the latest legislative changes. In addition, they often help clients adjust their estate plan for fairness, especially if a second wife is involved, Schwartz adds. Otherwise, children from a first marriage could receive nothing if the second wife outlives their father. Contested wills are uncommon, but wealthy clients who substantially change a long-established estate plan should ensure that their decisions are not reversed later.

Special Needs Can Make Planning Tools Complicated

Theodore O. Rogers, a partner at Sullivan & Cromwell who litigates probate and estates issues, says some affluent clients have complicated family situations. He suggests selecting a reliable, accessible witness to the signature who can testify if the will is challenged. He says some clients think a videotaped signing will prove that the signer is mentally sound, but Rogers disagrees.

“It sounds like a panacea—a great thing,” he says. “But from a litigation point of view, if that day [the signer] doesn’t look well, you’ve got a real problem. Or, let’s say they look great—pass with flying colors. But a year later, they have visibly declined and want another change. If you don’t make a new tape, you’re accused of hiding something. If you make the tape, you show a person who’s much worse. It limits your future options.”

Learn More About Estate Planning Law

See our overview of estate planning and related content for more information on this area of law, including:

• Federal estate tax liabilities and federal and state-level exclusion amounts;
• The difference between a living will and a last will and testament;
• Advance directives and appointing a durable power of attorney for financial and healthcare decisions
• The benefits of creating a living trust and avoiding the probate process.

Find an Experienced Estate Planning Attorney

For legal advice on creating an estate plan that meets your needs, visit the Super Lawyers directory to find an estate planning attorney in your area.