What is Estate Planning?
I was reading an article in the New York Times the other day about Roman Blum who died last year in New York at the age of 97. Mr. Blum, a Holocaust survivor who became a very successful businessman, had an estate valued at approximately $40 million. So far, after a year of investigation the state has been unable to locate either a will or any living relatives. On an estate of that size, federal estate taxes would likely be in the neighborhood of $12 million. There are certainly other significant expenses that are occurring as New York administers his estate. According to New York law, if after three years no Will or living family is located, whatever remains of Mr. Blum’s estate will ultimately pass to the State of New York. New York has received $12 billion in unclaimed assets from other estates since 1943.All of this reminded me of the definition I like to use for good estate planning. Estate Planning is a lifetime process whereby:• I control my property while I am alive and well• I take care of myself and my loved ones if I become disabled• I give what I want to whom I want, when I want and the way I want• I do so with the lowest possible amount of professional fees and court costsThough he was highly successful in life, Mr. Blum clearly has failed to fulfill the last two prongs of the definition of good estate planning. For no good reason, he has given up control of the assets he worked so hard for in life. Even without immediate family, he could have done great things and promoted much good in causes he supported. Sadly, he now has no voice in where his assets end up and he has likely paid the highest amounts in fees, taxes and costs that could be paid. Though most of us do not have estates the size of Mr. Blum’s, nevertheless we should not simply hand over control of our assets to the default provisions of state law.You can read more about Mr. Blum here: http://www.nytimes.com/2013/04/28/nyregion/holocaust-survivor-left-an-estate-worth-almost-40-million-but-no-heirs.html?pagewanted=1&_r=1