How Do I Start?

When I started advising clients in the early 80's, talking to families of “average” means about trusts was unique, at least in my practice and community. There was a prevalent train of thought that trusts for the very wealthy, or at least only for clients who were concerned about estate and inheritance taxes. It was often felt that all trusts were unduly complex and always required professional administration. And this train of thought was, more often than not, fostered by professional advisors.

Today, it is more common for clients and advisors alike to hold a more “sophisticated” view of this process, having often read or heard about revocable living trusts, powers of attorney, and such, and their supposed virtues.

Whatever the preconceived ideas a client arrives with, they are too often influenced by misconception and often, misinformation. Having conducted a fair number of “informational seminars” over the years, I have often said to prospective clients that “I don’t really care how you get started, as long as you get started.” Of course, from a purely selfish point of view, I would like it if all clients started the process with me. But in reality, there is a certain amount of value to my suggestion to just start somewhere.

However, I am concerned about the proliferation of self-proclaimed “estate planners” out there. Like any worthwhile endeavor, to do something well involves doing the hard work to master the subject, usually combined with a degree of professional training, staying current, and experience. It is equally important that the Estate Planning Professional know the areas where s/he is qualified and those which should be referred to other more qualified (by training and experience) professionals. Unfortunately, there is no “UL” listing for “Estate Planners.” It is not a “regulated industry” (at least not in Michigan) and so you need not have any credentials to call yourself an “Estate planner.” It is also a multi-disciplinary “industry.” Lawyers, Accountants, Financial Planners, Life Insurance professionals, Trust Officers, and other similar professionals are involved in the Estate Planning process. Any one or more of them may serve as the coordinator of your planning.

I am also concerned about the easy availability of information (whether accurate or misinformation and whether or not properly interpreted), from the internet, the media, and in bookstores. I worry about the infomercial approach to estate planning. I’ll be the first to acknowledge that I make my living “selling” my services as an Estate Planning Attorney. While I do produce legal documents to be used in the estate plan, I do not sell forms, or a kit, or a “one-size-fits-all” approach. Rather, I sell my experience and expertise in counseling clients about the proper tools and techniques for their particular circumstances.

So how do I answer the question, “How do I start?” Somewhere - by all means, just start. But hopefully that means that you seek out a qualified professional for assistance. I’ll comment on how I believe you should find and determine just who is a “qualified professional” next time.

Thanks for reading . . .

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What is "Estate Planning"

Clients often think "estate planning" is either broader or narrower than it is. Estate planning is not financial planning (although financial planning is certainly a part of it). Nor does executing a Will complete the estate planning process. Indeed, the word "plan" is instructional. A good estate plan is a kind of "blueprint" for an overall plan for family issues, dealing with incapacity, succession planning (particularly where family businesses are involved) and distribution of assets upon death. Thought must be given to each possible event when putting together the plan.

Estate planners have often referred to their job as "what if" planning. It is our job to consider all of the "what ifs" that might occur -- questions like: What if an heir, or designated agent, executor or trustee dies prior to your death? What if you die and your children have not yet reached the age of majority? What if after you make the plan, you experience incapacity and circumstances or the laws change in a way that negatively impacts the plan?

A good estate plan consists of a number of tools which when combined properly allow your designated successor(s) to effectively and efficiently carry out your wishes. Wills, Trusts, Durable Powers of Attorney, Business Entities, Joint Ownership, Beneficiary Designations are all tools which, when properly known and understood can achieve a highly successful result. Conversely, just possessing one or more of the tools and using them incorrectly, can create worse problems than doing nothing might have.

Over the next months, I'll share some thoughts on the use of some of these tools, as well as current ideas, techniques, and pitfalls of estate planning.

Thanks for reading . . . . . . .

Andy

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