Estate Planning – Complex, Multifaceted but not Difficult

If you read our law firm’s articles on a regular basis, you have gained a basic understanding of estate planning and the documents that make up an estate plan. For this article, I’ll be addressing the process of estate planning itself and discussing how each component of an estate plan works with the other parts. Estate planning is multifaceted and requires multiple steps to complete. It may feel like putting a puzzle together. While no particular step is difficult, it’s very important that all steps are completed. It’s also important to bring your team of advisors – your attorney, CPA or tax advisor, financial planner, and insurance agent – into the process. This is not the place to complete a ‘do-it-yourself’ plan. By working with your whole team, you can create a comprehensive plan that works for you and your family – one that meets your needs and accomplishes your goals.

The first step involved in completing an estate plan is to meet with an experienced estate planning attorney to discuss what type of estate plan is right for you. At an initial meeting, you will be discussing many subjects. These include your family members and relationships; real estate, financial, and other assets; health or medical concerns; probate; the distribution of assets at the time of your death; potential estate tax and other tax liabilities; charitable giving; life and other types of insurance; and any other issues unique to your situation.

Our firm has worked with clients who own property in two different states or outside of the U.S.; own mineral rights; or timeshares. Other issues include second marriages, blended families, special needs, potential MA/EW needs. Some clients face state or federal estate tax liability. Many of us own our own businesses which gives rise to other considerations such as succession, buy-sell terms, and authorizations. The list goes on. Each of our situations is unique and multifaceted.

So, the first step is to talk over all of these subjects and issues and then decide what type of plan to put in place, generally either a Will Plan or a Trust Plan. The next step is to draft and sign the documents that make up your estate plan, and, generally, these include a Health Care Directive, Power-of-Attorney, Will, and a Trust. There are also supporting documents that make up an estate plan, and these include assignments, certificates, deeds to address title to real estate and real estate interests, and beneficiary designation forms.

It’s rather obvious that completing the estate plan documents is the most important step to the estate planning process. Titling is another very important step. As you work through your estate plan process, each asset should be reviewed and discussed. You and your estate planning attorney should determine how it fits and works in concert with your estate plan. Your tax, financial, and insurance advisors can assist with this process, too. Even a sophisticated, well-drafted estate plan can be unraveled by the failure to complete the titling step.

For real estate, we typically use a transfer on death deed (TODD) with a Will Plan. For a Trust Plan, real estate is typically retitled in the name of the trust. All real estate interests have to be addressed otherwise you risk stranding an asset that requires a full probate at the time of death. A primary purpose of a Trust Plan is to avoid probate and this can easily be undone by failing to retitle a real estate parcel or an interest in real estate such as a fractional interest, interest in a contract for deed, or remainder interest.

Bank accounts, investment accounts, and retirement (qualified) accounts need to be addressed as well. There are several options as far as titling these types of accounts, and your particular needs and situation as well as the tax consequences should be evaluated in each case. For example, whether a bank account should be closed and a new account in the Trust should be opened really depends on each person’s particular situation. Naming individuals or a Trust as ‘payable on death’ (POD) or ‘transfer on death’ (TOD) are options. Of course, for life insurance and qualified plans, we name typically name a primary beneficiary and contingent beneficiary.

Once your estate plan is complete, talking to your family members about your plan is very important. You’ll want to find a secure place to store your estate plan documents and tell your family members where they can locate them and other important documents. Talk to your health care provider about the existence of your Health Care Directive and provide them with copies.

Lastly, keeping your estate plan up-to-date is important, too. Changes in your circumstances, certain actions on your part, and common, lifetime events may have an impact on your estate plan. Such changes may include purchase or sale of real estate, a substantial change in your investments or financial plan, a birth, adoption, marriage, divorce, or death in your family, moving to another state, an inheritance or a significant change in your financial situation. If one of these occurrences takes place, modifications may need to be made to your estate plan. Sometimes it’s just a simple change that’s needed and sometimes it’s better to do a full update.

A good estate planning attorney and your advisors can help you put a tailored estate plan in place that’s right for you – they can help you complete all the steps necessary to complete the multifaceted puzzle that creates your estate plan – one that gives you peace of mind and ease of administration for your family.

Any requests for topic suggestions may be sent to Although we cannot give you legal advice through the column, we can provide some general information that may be helpful for you to know. Our purpose is to educate and we hope that you can take something new away from this column each time you read it.