5 Great Estate Planning Tips

A study from Everplans revealed that 69% of Americans say they have seriously considered writing a will, yet only 34% follow through. Another 95% say they don't plan well for the handling of their estates due to lack of knowledge.

Yet only a cursory look at the estate planning landscape reveals that "lack of information" excuse is just that - an excuse. There is plenty of information and options to create a good estate plan.

When you do find a good estate planning attorney, the ground you cover becomes paramount. There are several must have estate planning components that result in a solid estate plan.

1.  Know who will take care of your estate - Accept that you will need to do this type of planning, its necessity and its urgency. Decide who you can trust to take care of you and your estate, and it may not be your spouse or your children. Not everyone's kids are best suited for this task. Next, select a well-recommended estate planning attorney, and not a general practice type, as estate planning is a specialist's game. For example, you select a surgeon on how many times he or she has performed an operation, and the same holds with attorneys. Also, don't appoint co-trustees. That just guarantees conflict.

2. Have a flexible vision -  With the constantly changing estate tax laws and increasing estate tax exemption, flexibility is becoming more key in estate planning documents. While it is wise to sit down with your estate planning attorney when significant changes happen in your life, have flexibility written into your estate plan documents that account for future changes in tax laws. "Disclaimer planning" is one such technique. This basically allows the surviving spouse, within a certain period of the decedent's spouse's death, to decide whether a certain amount of assets pass into a testamentary trust -- e.g., estate tax savings-- or pass outright to the surviving spouse. Providing this flexibility could allow the couple to avoid several trips to the attorney's office while giving them the ability to minimize estate taxes should the situation warrant.

3. Fund your trust - A common estate planning mistake is establishing a revocable trust without actually funding it.

A living trust is the best way to provide the mechanism for someone else to manage your financial affairs when you die or lose capacity. However, frequently people establish revocable living trusts, sign the trust documents, but then fail to take the next steps and actually fund the trust with the appropriate assets. This means retitling investments, bank accounts, and other financial assets from individual or joint accounts into the trust and transferring the deeds for real estate into the trust also. You may want to list the trust as a beneficiary in your life insurance policy. That can be a challenge and may require professional assistance to reregister financial accounts and get new deeds for real estate with the trust as the owner. This is imperative if you want the living trust to function properly and serve its intended purpose. Our office has handled countless trust administrations after a death and I can't tell you how many times we see trusts that are not correctly funded. 

4. Life insurance - If you need a death benefit to replace your income or protect your family if you die prematurely, make sure you buy death insurance and don't let someone sell you life insurance. This is particularly important for young families. By death insurance, I mean simple, low-cost term life coverage that provides a sufficient death benefit without the bells, whistles or cash value.  The purpose of the insurance should be to manage the risk of one's dying prematurely for a defined period of time and that's it.

5. An effective durable power of attorney -  A durable power of attorney is one of the most important estate planning documents you can have. It allows you to appoint someone to act for you (your "agent" or attorney-in-fact") if you become incapacitated. The typical durable power of attorney document I see is the 2-3 page checklist of broad powers with no further explanation of those powers. This is insufficient in my opinion. 

The power to do Medi-Cal and long-term care planning is a particularly important power. This is the power that can save an estate for the healthy spouse and children. A checklist form does not cover this. The agent must have the power to create Medi-Cal trusts and make gifts. For more information, see "Why Not Just Use an Off-the-Shelf Power of Attorney Form?"


If you don't have an estate plan, and you have dependents counting on you, it's time to get one. Start with the tips above and make sure you're working with an experienced estate planning lawyer. Our firm follows the tips above. Contact us at our Beverly Hills or Calabasas offices and\or shoot us a question.

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