I am not a control freak, I swear. And while I currently have a color-coded calendar, may have an embarrassing history with coordinating pens and notebooks based on subject matter, and relished spending a recent weekend with 32 new organizational bins, I fully realize that not everyone operates this way. I do believe, however, a certain level of control and organization is something that almost everyone appreciates. I find this especially true in the world of estate planning.
First, to be blunt, both clients and attorneys find it easier to talk about control than the end of life. But the benefit of framing the conversation around control goes well beyond making it easier to have a conversation. Estate planning is about helping clients maintain control of their stuff (money) when they are no longer able to guide the process.
You can’t take it with you. If you don’t document your own order for what happens then someone else’s priorities will apply. Uncle Sam’s priority is, of course, to capture all the revenue the federal government is entitled to via estate and gift taxation, and your State not only takes its share in taxes but will decide who gets your stuff based on intestacy statues, which may or may not be the way you prefer to divvy things up.
Goal! Clients usually have goals that do not align precisely with Uncle Sam and the State. While tax savings is an important element of this, focusing on all of a client’s goals allows for better estate planning. Assessing clients’ true goals leads to a better plan, one that is reflective of their unique circumstances and financial position. It is also empowering: it allows the client to have the feeling of control over these complicated and difficult issues.
While this is by no means a comprehensive list, there are some common things to listen for when discussing goals with clients:
- What do they want to do now with their assets? Are they seeking permission to spend on themselves after saving their whole life? Might it be time for a dream vacation or a larger charitable gift to a favorite organization?
- Is there someone they are supporting or would like to support? Perhaps there is a great niece needing college funding or children with special needs that need additional support throughout their lives.
- Is there an institution that is meaningful to them? For some clients this is habit, for some it’s the first time they are thinking about donations to arts, educational, research, charitable or religious organizations.
- Are there children who they want to entice to behave a certain way? Plans can be created with contingency funds to become accessible upon completion of a degree or specific advanced degree or age.
- What does the client want to do with the family home or the cabin Up North? Putting real estate into a cabin trust or LLC could be considered.
- What about the rental property, farm land, or small business interests? There are too many useful tools for these issues to cover here, just don’t forget they are part of the picture, too!
Getting to know a client’s true needs, lifetime objectives, and legacy goals is crucial to effective estate planning. By framing the discussion around goals and control we also give our clients power over an intimidating situation.
All photos protected by copyright. © 2012 Erika Stein Rosenhagen