EP2As an elder law attorney, I see hundreds of estate plans every year. Most are adequate – they cover the minimum requirements and are not so outdated that they no longer make sense.

You could easily do that too. For $10, you could buy some basic forms at a legal stationery store, fill them out to the best of your ability, and have them witnessed and notarized. Presto! You have an adequate plan that may work well most of the time. Unless something unexpected happens.

Or, with a little more investment of time and money, you could have a great estate plan – one that provides protection for you and your assets during your lifetime (especially if something bad happens to you), security for your spouse and family, and protection of beneficiaries after you’re gone.

Here are my three keys to having a great estate plan.

Cover all the bases

In the noir classic film Body Heat¸ actor William Hurt talks to Mickey Rourke (playing a convict) about how to commit a murder. “There are about 50 things that can go wrong,” Rourke tells him. “If you think of 25, you’re a genius.”

Estate planning can be like that too.

To have a great estate plan, you should sit down with an experienced estate planning attorney and go over everything that could arise in the coming years – the 25 issues you can think of, and the other 25 that never would have occurred to you. Here are just a few:

  • What happens if you or your spouse die unexpectedly? Do you realize all the ramifications?
  • Does your estate plan minimize income taxes and capital gains taxes, and if so, how?
  • What happens if you become incapacitated – does your power of attorney not only appoint someone to act for you, but also prescribe the precise powers they will need to provide for someone in your exact circumstances (taking into consideration the 2014 changes to Pennsylvania’s POA statute)?
  • If one of your children dies before you do, how does your estate plan address that contingency?

A great estate plan covers all the bases and provides for as many of the unexpected hazards of life as possible.

Here is where working with an estate planning attorney pays off. You benefit from the experience gained from seeing thousands of estate plans go well and go wrong. We know what to look for.

Provide for asset protection

When it comes to asset protection, garden variety estate plans just don’t cut it. I can’t tell you the number of times a client has come to me in a crisis (nursing home admission, death of a family member, sudden incapacity) and poorly drafted (or non-existent) estate planning documents actually prevent the client from protecting assets.

For example, we could save the family hundreds of thousands of dollars by transferring funds to a spouse or disabled family member, and thereby qualifying for Medicaid benefits, but the power of attorney prohibits the transfer.

A great estate plan foresees the ways someone with your assets, in your circumstances, might stand to lose the assets that provide security for you and your family. It then gives you the tools you need to weather a crisis.

For this reason, a great estate plan is surprisingly cost-effective.

Protect beneficiaries after you’re gone

A will most people consider “adequate” divides assets among the person’s beneficiaries after the person’s death.

Here is a short list of problems I have seen with poorly considered distribution plans:

  • A $350,000 distribution going to a low-interest sequestered account for a minor, and then handed over to the beneficiary at the age of 18. (Wouldn’t it have been better to have the funds invested and managed by a responsible trustee, and used for support and education until the beneficiary reaches age 25 or 30?)
  • A $110,000 bequest to a disabled grandchild made the beneficiary ineligible for her federal disability benefits and Medicaid health care coverage. Court intervention was needed to place the bequest into a special needs trust. However, if any funds are left when the beneficiary dies, they must be used to repay the state for lifetime benefits. With better planning, any remaining funds could have benefitted other family members.
  • An inherited IRA worth roughly $300,000 lost to creditors when the beneficiary went into bankruptcy. (See the 2014 U.S. Supreme Court case, Clark v. Rameker.) A trust would have provided protection that the Bankruptcy Code does not.

A great estate plan not only divides your assets, it protects them for your beneficiaries in case of divorce, disability, financial problems, and any number of other potential hazards.

Learn more

At our estate planning workshops, you can learn more about the latest techniques for having a great estate plan. See our Events Calendar for dates and times, and call (412) 531-7123 to register.


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