I have to make my apologies to Terry McMillan, the author of “How Stella Got Her Groove Back” for transforming her title. However, the storyline, facing the realities of balancing family, work and life, have come back to estate planning, at least for the 95% of us not facing the possibility of estate taxes.
For the past several decades, attorneys have pushed their clients towards planning for taxes on their estates. With a $1 million threshold, and then a dizzying rising, ending and thankfully stabilizing threshold for estate taxes, most people can safely ignore the tax issues and concentrate on the new, new reality – what matters to them. There may still be state estate taxes, and state inheritance taxes, lurking, but many states are now moving those thresholds up, to recognize the fact that $1 million does not go as far as it used to.
Estate planning is an art, not a cut and dried science. While what you see can seem to be a standard form, it should not be. Lawyers hate to admit it, but we depend on standard, tried-and-true language to get the job done. However, that does not mean that the planning behind the language is cookie-cutter, same for all families, planning.
There are always at least two parts to estate planning: the ‘what do I have to pass down’ part, and the ‘who gets it’ part.
Most people do not keep track of their assets – what they are, where they are, and how they own them. Organization does not have to be hard, but you do have to start. If you check on my website, you will see a financial organizer. Go ahead and download it, and get started. It is in an Excel format, to let you easily total up your assets. You can do the same thing in any format, but the important part is to get started.
Second, the ‘who gets it’ part doesn’t seem difficult, but then comes the question of when, and how they get it. At your death seems the obvious question, but what about a child that has special needs, or has an unstable marriage? ‘At death’ does look like the right answer then. Second marriages can also be problematic. Does the surviving spouse get the house, most likely the major asset of a family? Do the children get it after the surviving spouse passes away? Who pays for the costs of keeping up and repairing the house in the meantime? Part of getting your groove back is taking a long, hard look at the realities of your family.
Estate planning is also no longer a question of passing what to whom – it includes such tough lifetime planning questions such as planning for assisted living or nursing home care, deciding who will make decisions for you if you can’t because of illness or incompetency. In these situations, will you depend on your family or a friend, or leave it to the doctors and courts to decide what is best for you?
These are all tough questions, but the reward in not ignoring them is more than just peace of mind. Planning allows you to move forward with the important parts of your life – time you spend with your family.