Estate planning is primarily about how to pass your property on after your death to the recipients of your estate with a minimum of fuss, expense and taxes. But, it is about a lot more as well.
Whether and how you plan your estate can mean that your children will or will not be on speaking terms after you’re gone. It can determine whether they will be short-changed by Medicaid claims or estate taxes, or will be less financially pressed due to what you are able to leave them.
There’s the father who set up a trust for his life insurance, but never transferred the policy into the trust and who had a large IRA with no named beneficiary. More than half of his estate went unnecessarily to estate and income taxes.
There’s the uncle who wanted to leave his estate to one niece. We know this from a series of statements found in his safe deposit box. But he never executed a will. As a result, another niece and nephew also shared the estate. There are also many instances of funds going to disabled beneficiaries receiving public benefits. Without a trust, this generosity can result in loss of Medicaid or Supplemental Security Income for the disabled heir, greatly reducing the benefit of the gift.
These are the cases of being penny wise and pound foolish. The effort to avoid attorney fees often means greater attorney fees having to be paid by the heirs as they fight over the spoils or pay to clear up a title problem. It’s a lot cheaper to execute a high-quality estate plan than to clean up the mess left by no estate plan, or one that’s poorly thought out.
Your estate plan can be an ideal means to leave a legacy for your children or through charitable bequests!
For assistance with developing your estate plan, please contact me at 630-377-3241.
Linda M. Strohschein