Sunday, January 15, 2006

estate planning

Even modest property holdings call for final disposition through a will, though it is only when property holdings are large enough to meet requirements for federal and state estate taxes (over $600,000 to require federal taxes and varying amounts from state to state) that cash expenditures for assistance with estate planning are necessary. For many people a will drawn up with the use of a self-help guide purchased from a bookstore, or with advice from a Legal Aid Society or local area agency on aging, may be sufficient. People with taxable property, however, need to retain the services of an attorney who has specialized knowledge of estate planning. For such people, failure to consult an estate planner can deprive heirs of their legal inheritance as a result of overpayment of taxes. A national survey showed that even though 80 percent of the public thought that it was better to make plans for death, only 25 percent had drawn up a will. A great many people die without leaving a will (intestate), apparently under the mistaken notion that their property will automatically pass on to their spouse-but it is not quite that simple. To die without a will is to invite battles in the family. Children's inheritances also may be reduced when one's spouse dies unless there is a will that states, in language specified in the tax law, the intent to make use of the federally approved marital deduction. Because of the complexity of estate planning, and the need to tailor plans to personal circumstances, only the most basic elements of estate planning can be outlined here. First, an attorney should be consulted when drawing up a will, or to determine if an existing will meets current federal and state law. Second, the beneficiaries should be decided upon-spouse, children, relatives, charities, churches, colleges and schools, museums, public art galleries, musical foundations, etc. Third, the information needed for making a will should be organized: beneficiaries' names and addresses, Social Security numbers, birthdates; a list of assets and obligations should be compiled; property that is held jointly or individually should be specified; life insurance companies, policy types, and value of policies should be identified. Fourth, the possibility of using trusts for taxes as well as to assure the safety and security of funds left to others should be considered. Fifth, an attorney should be consulted to determine if joint ownership of property, like an automobile, home, or boat makes sense -- generally it does, but not always. Sixth, an executor should be named. Seventh, specific items, such as jewelry, antiques, and art works, should be willed. If necessary, an inventory of specific bequests to individuals or institutions should be drawn up. Last, instructions for final matters-arrangement for the funeral, cremation or interment, or other important considerations-should be left.
Russell, C. H. Good News About Aging. New York: John Wiley and Sons, 1989.
Weaver, P., and Buchanan, A. What to Do with What You've Got: The Practical Guide to Money Management in Retirement. Washington, D.C.: American Association of Retired Persons, 1985.


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