Non-Tax Considerations in Estate Planning

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In estate planning, we often focus heavily upon (a) reducing estate taxes and (b) avoiding probate.  But equally important are the considerations regarding our family who survive us, and the legacy we wish to leave behind.   Here are a few considerations which should always be discussed when clients think about the estate planning process:

  1. The estate planning document (Will or Trust or both) is often the last written statement which we leave for our survivors. It’s never a certainty that you’ll be able to change these documents just before your passing, and sometimes circumstances change between our last revision and our end of life; therefore, you should take special care if you feel the need to add emotionally charged language in these documents (Just like e-mail, those statements are forever).
  2. If you have more than one child, and you intend to treat one child with a greater inheritance than the other(s) or appoint one child as your successor Trustee or Executor of your Will to the exclusion of the other child(ren), consider how this will affect the family after your death.  There’s never a fair way to differentiate between or among children where one of them might feel slighted, so it’s better if you clear the air before your death, even if you think that will be uncomfortable for you.  Most children understand the privilege of age (giving the older child more responsibility) and proximity (giving more responsibility to the child who lives closer to you), but there’s no right answer when you wish to have one child receive a greater inheritance than another.  For example, imagine a parent who has two children, where Child 1 has a successful career and doesn’t really need his/her parent’s inheritance, but Child 2 has had a lifelong financial struggle, and will still have that great need after his/her parents are gone.  If the parent leaves more to Child 1, as some form of evening out the greater financial given to Child 2 during the parent’s lifetime, Child 2 will only hear “I loved Child 1 more.”  If, on the other hand, the parent’s focus is to provide extra support for Child 2’s greater needs, it is often the case that Child 1 feels he/she is being penalized for his/her success.  Whatever the motivation for the different treatment among children, it must be explained to the family in advance so that the air can be cleared, regardless of the discomfort of such a confrontation.  Without this process, your family is doomed to resentment and division.  This is an especially prominent issue with it comes to the recipients of your tangible personal property, by reason of it being tangible and visible at all times (unlike money).
  3. Life changes as we survive.  Over time, our outlook on our legacy will change.  Don’t think of estate planning as a “set it and forget it” process.  Your Executor and successor Trustee nominations are particularly susceptible to change as the years and relationships pass.  Take another look at your estate plan every 5-6 years.
  4. Remember that, since the Thirteenth Amendment to the U.S. Constitution, we don’t allow slavery.  Any person you nominate as your Executor or successor Trustee, or even the guardians of your minor children, can decline to serve for any number of personal reasons.  Be sure to evaluate these choices on an ongoing basis, and make sure that your documents contain back-up nominations in case your first choice is or becomes unwilling or unable to serve.
  5. Think of the legacy you are leaving, and ask yourself: “Will I be remembered because of the way that I died or the way that I lived?”  If you have any philanthropic passion, your estate planner can show you tax-savvy ways to leave a bequest to your favorite causes, and that also sends a message to your heirs as to what you stood for.  You should also inquire: “Is there more to the legacy I wish to leave than just adding wealth and comfort to my heirs?”