Estate Planning Basics - Softcover

Clifford Attorney, Denis

Softcover

ISBN 10: 1413307027 ISBN 13: 9781413307023

Publisher: NOLO, 2007

Synopsis

This quick read makes understanding the rules of estate planning easy! Estate Planning Basics provides concise, straightforward and easy-to-read explanations of the major components of estate planning, so that you don't have to spend hours wading through endless options (most of which apply to the wealthy). Learn about choosing beneficiaries, estate planning for parents with minor children, wills, living trusts and other probate-avoidance methods, including: using a retirement plan like an IRA or 401(k) as an estate planning device, estate taxes and tax-reduction methods, trusts for people in second marriages, or for those leaving property to a disabled person and planning for the handling of medical and financial decisions if one becomes incompetent. Attorney Denis Clifford gives you the reliable, plain-English answers you need, whether you're doling out the family heirlooms or steering clear of estate taxes. The 4th edition is updated with the the latest estate planning laws and information of your state.

About this title

About the Author

Denis Clifford, a graduate of Columbia Law School, where he was an editor of The Law Review, is a lawyer who specializes in estate planning. He is the author of many Nolo titles including Quick and Legal Will Book and Make Your Own Living Trust and co-author of Plan Your Estate and A Legal Guide for Lesbian and Gay Couples. He has been interviewed by such major media as The New York Times, Los Angeles Times, and Money Magazine.

Excerpt. © Reprinted by permission. All rights reserved.

Introduction

Who needs to bother with estate planning? Here's the short answer:

anyone who owns property that matters to them, and
anyone with a minor child (under 18).

Estate planning isn't only for the rich, nor are there minimum property requirements, such as owning a home. Anything you care about -- from art works to gold earrings to items with little or no market value such as the old family rocking chair or loved photographs -- is significant enough to warrant at least basic estate planning.

The key is to ask yourself whether you own any property that you want to go to a specific person or organization when you die. If the answer is yes, you need to create a plan to make sure your desires will be carried out.

Example: Tracy told me she had no reason to worry about estate planning; she was a carpenter. I asked her if she were sure she owned nothing she cared about. She answered "No, nothing -- well, I guess my tools." When I pressed her a bit, she estimated they were worth, in total, over $35,000. I told her that if she did no planning before she died, her tools would be divided, according to state law, between members of her family. She exclaimed that wasn't what she wanted at all. Everyone knew she wanted her tools to go to her partner, Alex. I explained that she could guarantee her goal by preparing a very simple will. Later, having prepared a will, she told me, "You know, that's been nagging at me for years." I answered that she was definitely not alone. If you have a minor child, or children, you automatically have estate planning concerns. Who will raise your child if you can't? More precisely, if you and the child's other parent, if there is one involved, die before your child is a legal adult (over 18), who will be the adult responsible for caring for the child? Legally, there are two different adult roles involved. The first is raising and nurturing the child -- having legal custody, and making day-to-day personal decisions on the child's behalf. The second adult role is managing any property owned by, or left for the use of, the child. By law, minors cannot control any significant amount of property they own. Commonly, parents name one adult to serve in both capacities.

Example: Felicity and Joe have two young children, ages one and three. They own an inexpensive car, personal and household belongings, and two life insurance policies for $100,000, one on each spouse's life. If one parent dies, the other one will, of course, carry on. But like many parents, the couple worries about what will happen if they die together. They discuss who should raise their children and manage the insurance money if they both die. They are pleased and relieved to agree that their wisest choice is Joe's sister Susan, who loves their kids and is securely married with one child of her own. Felicity and Joe discuss the matter with Susan, who agrees to serve as guardian if the need arises. Joe and Felicity also are aware that present stability is no guarantee of lifetime security. If Susan's life drastically changes for the worse, Joe and Felicity will then make new plans for the care of their children.

I'm Not Ready

I've thought of putting that phrase on my tombstone, though I decided instead to use what I cried out as a child whenever my parents asked me to do a chore: "Right now?" But, all kidding aside, "I'm not ready" is how many people feel about estate planning. There are some understandable reasons for this procrastination: a busy life, a rational mistrust of lawyers, a sense that estate planning is boring. I suspect, though, that there's often something more primitive at work: at least a touch of superstition, a fear that thinking about death might somehow hasten its occurrence.

If you procrastinate until death, that will prove costly to your inheritors, and may well mean that your property will not be distributed as you wish. If you die without a will or other valid transfer device, your property will be divided between family members according to a formula established by state law. A judge will appoint someone of her choosing to supervise the distribution of your property. Your estate must pay this person's fee, which can become quite hefty.

Similarly, if you have minor children and the other parent is not available or suitable for custody, you won't want to take the chance that you'll have no input regarding who will raise the children if you can't.

In sum, ready or not, it's wise to get your estate planning done soon.

Edition details

• Publisher: NOLO
• Publication date: 2007
• ISBN 10: 1413307027
• ISBN 13: 9781413307023
• Binding: Paperback
• Language: English
• Edition number: 4
• Number of pages: 224