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What is Estate Planning?

What is an Estate Plan and do I Need One?

Most of us spend years building a nest egg that will give us financial security as we age. Building your nest egg is important but keeping it is just as important! You want it to be there for you and your family when you need it down the road. A well-designed estate plan can help.

The best way to understand what an estate plan is to define what it is not: an Estate Plan is not a product, a document, a will, a living trust, or a nursing home insurance policy. It may involve some, many, or no documents. 

An Estate Plan is a Strategy to Preserve and Protect your Wealth.

Your Estate Plan should be unique to you – not a cookie cutter one-size-fits-all solution. A solid Estate Plan starts with a comprehensive analysis of your family, health, financial and tax situation by a team of qualified professionals. If you have not been involved in a comprehensive professional analysis of your family, health, financial and tax situation, you may not have an Estate Plan that will protect your assets in health, sickness, death and changes in the law.

Should Everyone Have an Estate Plan?

Most people believe that you have to be a “fat cat” to benefit from estate planning. Nothing could be further from the truth. Estate planning is for everyone, whether your estate is $10,000 or $10,000,000.

Regardless of the size of your estate, you need to have a plan to preserve and protect your wealth. You need to have a plan for how your assets will be managed if you are incapacitated and where your assets will go at your death. Your estate planning strategy should cover the tax consequences of actions you might take down the road. Your Estate Plan may be a very simple plan involving the use of basic documents or it may be extremely complex, using many legal documents and advanced planning techniques. Remember, if you don’t have a plan, the government has a plan for you…and you are not going to like it!

Can I do it Myself?

Yes, you can. There are ample documents available at bookstores, libraries, and on the Internet. However, we believe that do-it-yourself estate planning is one of the most dangerous types of legal self-help. Think about it: if you attempt to do your own divorce and fail, you can try again. By contrast, if you try to do your own trust or estate planning and you die or become disabled, if you invest your assets in a way not to your benefit or you don’t take advantage of tax strategies because you don’t know about them…you will not have another chance to fix them.

Partner With an Estate Planning & Elder Law Attorney

Cooper, Adel, Vu & Associates is dedicated to:

  • Building and continuing relationships with our clients
  • Protecting their wealth from the devastating costs of home health care or a nursing home stay
  • Conserving their wealth for their use during their lifetime
  • Sheltering their wealth from unnecessary taxes
  • Assuring that their wealth is transferred to their heirs with minimal cost, delay and likelihood for squabbling.

Among the Steps We Take on Your Behalf…

  • Advise you about options to avoid the cost and hassle of probate
  • Assure that your assets are distributed to your heirs in the way you desire
  • Protect the assets you spent a lifetime to earn from the cost of a nursing home stay
  • Minimize income taxes on retirement account distributions and contributions to your church or charity
  • Avoid capital gains tax for your spouse and heirs
  • Protect the inheritance you leave behind from an heir’s future death, divorce, creditor, or medical bill

Do I Need a Tax ID for My Living Trust?

  • You already have one – it’s your Social Security Number (SSN).
  • Sometimes a bank or real estate title company will ask for a separate Tax ID Number (TIN) – also known as Employer ID Number (EIN).
  • Generally a Trust doesn’t need its own Tax ID during the Grantor’s (creator’s) lifetime.
  • As Grantor of the trust you are responsible for reporting any income or losses for the Trust under your own Social Security Number – you only have to file one tax return.
  • After the last Grantor has passed away, the Successor Trustee will need to get an EIN from the IRS and separate tax returns may need to be filed.

Can I Leave $1.00 to a Problem Family Member

Let’s say that you are worried about a family member causing problems after your death by challenging your will or trust. You may be told that the best way to prevent this is to leave them a nominal amount, such as $1, and this will prevent them from challenging. However, this practice often has the opposite result. The reason is that someone who stands to inherit a nominal amount then only stands to lose a nominal amount if they mount an unsuccessful challenge. 

In fact, a much more successful strategy, called the “skin in the game” approach, actually calls for just the opposite of the conventional wisdom. The idea is that if you think that someone is likely to mount a legal challenge to your estate, you would actually designate them to inherit more than a nominal sum, for example $10,000, and would stipulate that any sort of challenge or complaint would cause them to forfeit said distribution. They are then faced with a choice between a long and potentially costly legal battle with uncertain results or take the definite distribution and everyone can move on. Critics may say that this practice is just “hush money” or merely a “buyout”. 

However, the harsh reality of today’s legal system is that even the most baseless or frivolous can cost tens of thousands, or more, in legal fees and drag on for many years. The benefit of this approach is that it provides a certain and quantifiable alternative. 

Attend a Free Workshop

Learn how planning can help protect your life savings from being lost.

Contact us today to signup and attend a free seminar.

Dually certified by the National Elder Law Foundation as Certified Elder Law Attorneys and the Ohio State Bar Association as Specialists in the Area of Elder Law.