Estate Planning – Essential Questions


Volume 9 • Issue 5 • May 2019

The Counselor is a monthly newsletter of Hallock & Hallock dedicated to providing useful information on estate planning, business succession planning and charitable planning issues. In this month’s issue, we will discuss essential questions that must be answered as you engage in estate planning. If you are interested in learning more about the ideas and processes discussed in this newsletter, please contact us for an initial consultation.

Whether your estate is large or small, simple or complex, there will be certain essential questions that need to be answered as you move through the estate planning process.  In defining what estate planning is, it is good to think of it as a process.  A good estate plan is one that will:

  • control property while you are alive and well;

  • plan for you and your loved ones if you become disabled;

  • avoid probate;

  • give what you have to who you want, the way you want, and when you want;

  • ensure the long term control and protection of property; and

  • leave a legacy for your family or community.

As you prepare to enter the process of creating your estate plan, here are the questions that you will need to answer along the way:

  1. What do I own? Ultimately, the planning of an estate is about the orderly transition of assets from one person to another. In order to make sure those assets can be planned for and transferred in that orderly manner, it is important to have a clear understanding of what you own. Additionally, it is important to have at least a rough idea of what the assets are worth so that a determination can be made about possible estate tax concerns.

  2. Who are my beneficiaries? State law will provide who inherits your estate if you do not plan. Is that what you want? Early in the process it must be determined who will inherit your estate when you have passed on. These are your beneficiaries. Beneficiaries may include a spouse, children, grandchildren, charities, or anyone or anything else you want to inherit your estate. In looking at beneficiaries, attention should be given to individual circumstances. For example, is there a special needs child?

  3. Do I want to avoid probate? If you want your estate to avoid probate at death or guardianship/conservatorship during your life, it is important to plan for avoiding court involvement.

  4. Do I want my estate plan to provide protections in the event my spouse re-marries? Planning for re-marriage protection may include all or part of your trust becoming irrevocable. It may include planning for third-party oversight. It may include incentivizing prenuptial agreements. Absent planning to the contrary, all or part of your estate will automatically pass to a surviving spouse. If that spouse re-marries without a prenuptial agreement, the estate is at risk of being lost to the new spouse, at least in part.

  5. Do I want to make a gift to charity? Charitable giving can be a rewarding part of your plan. It can have income and estate tax advantages as well. Proper planning will allow you to meet all of these objectives.

  6. Do I want to give a specific gift of real property, stocks, or cash to an individual? This gift will come off the top of your estate before the division of assets among residual beneficiaries. Specific gifts of this nature must be set forth in your will or trust.

  7. How do I want the balance of my estate distributed? Anything left after any specific gifts falls into what is called the residuary. Often the residuary is divided equally or in differing percentages among a group of people, like your children.

  8. When do I want the balance of my estate distributed? Often we think that the estate must be distributed immediately at death, but this is not the case. The estate can be distributed at certain ages, or over a period of years, or in some cases held in trust for multiple generations.

  9. If a beneficiary has passed away before me, who gets that person’s share? Does the share go to his descendants? Does it go to a spouse? You may have time to fix this after the death, but you may not. What happens to the share if you can’t or don’t?

  10. Who will be in charge of managing my financial affairs if I am unable to do so because of death or incapacity? Whether it is death or incapacity, someone will need to manage your affairs. There should be at least one person to take over for you and at least one back-up to that person.

  11. Who will take care of my physical needs and make medical decisions if I am unable to do so because of incapacity? If you become incapacitated, someone will need to fill this role. Again, there should be at least one person to take over for you and at least one back-up to that person.

  12. How will my incapacity be determined? In lieu of having a court declare you incapacitated, would you prefer that decision be made by a doctor, a couple of doctors, or some other group of people? In your planning, you have the option to define how this decision will be made.

  13. Do I want to be kept alive on life support? If you will only be able to stay alive on life support with no real possibility of recovery, would you want that life support withdrawn? This is a decision that should be clearly stated in writing as well as discussed with those you have identified as making your medical decisions.

  14. Who will be in charge of taking care of any minor children? While this may be the same people who are making decisions for you, often they are different. The person meeting your physical needs may not be the person you want to take in your children. Again, there should be at least one person to take over for you and at least one back-up to that person.

Estate planning is unique for each individual or couple. As a result there will be many questions unique to each estate.  However, the foregoing questions are ones that must be asked in every instance and will help the estate planner in uncovering issues that must be explored in greater depth in your individual plan.  As you prepare to come in to visit your estate planning attorney, consider how you would respond to each of the above questions.

This Newsletter is for informational purposes only and not for the purpose of providing legal advice. You should contact an attorney to obtain advice with respect to any particular issue or problem. Nothing herein creates an attorney-client relationship between Hallock & Hallock and the reader.