Estate Planning Basics

Thursday, April 23, 2009

Spots on the X-Ray: or who needs an estate plan?

I often get asked: "how do I know when I need an estate plan?"  It is a simple question but an important one.  There are certain issues or circumstances that will demand attention.  I call these spots on the x-rays.  If your doctor takes an x-ray and sees something out of the ordinary, he or she will investigate the cause of those spots and offer the appropriate cure.  Lawyers do the same thing; they're just looking for different spots.

Here is a list of important issues that, if present in your situation, need to be addressed in your estate plan.  If you have any issue on this list, please feel free to call our office to discuss your options.

  • Minor children - having minor children is a huge responsibility, and parents must have a plan in place as to how their children are to be cared for and by whom.
  • Blended Families - When a couple each with children from prior marriages decide to get married, unique issues are created and special care needs to be taken to ensure that each spouse's plans are realized
  • Special Needs Children - A child, or other beneficiary, with special health, physical, or educational needs equally special attention in the planning process.  Special features must be incorporated into the estate plan to ensure that the inheritance doesn't disqualify the beneficiary from any government benefits that they would otherwise be entitled to.
  • Business Owners - One of the biggest shortcomings I see in an estate plan is the failure of many business owners to have a comprehensive exit strategy.  Careful planning is required to ensure the value of the business is maximized and that is transferred to the correct people upon disability or death.
  • The Family Cabin - Many people have a desire to preserve the family fishing cabin or hunting land in the family for generations to come.  It is a very difficult task to accomplish without careful planning.  Many times, family property left to the kids is quickly lost to unrelated parties via, divorce, death, or bankruptcy.  A Family Cabin LLC or trust can help you accomplish your goal.
  • Nursing Homes - Many people are worried that the assets they have built over the last 40 - 60 years can disappear in just a few years if the family is forced to spend $6,000 - $7,000 per month in a nursing home.  This is a valid concern and the earlier you address the issue, the better outcome you will achieve.
  • Estate dominated by one asset - This occurs frequently in farm families and small business owners.  One asset comprises 80% of the estate; one child would like to run the business/farm, but the Will says everything is split evenly among the 4 kids.  How do you accomplish this without saddling the one child with a debt load that will make it impossible to run the business profitably?
  • Large Estate - Most people have heard of the Estate Tax, but what is it and how can we avoid it?  The Estate Tax is a constantly evolving topic in the estate planning world and deserves special attention as it has often been referred to as a voluntary tax.  With careful planning for those families affected by the tax, many thousands of dollars can be saved for the family.
  • Children at financial risk - Whether it's bankruptcy, divorce, incarceration, drug or alcohol abuse, gambling problems, health concerns, high-risk occupations, spending issues, or just plain irresponsibility, a carefully drafted estate plan can protect your children from their creditors and predators; it can even protect them from themselves!

Please feel free to contact our office to discuss any of these issues.

MacDonald Law Office, LLC assists clients with Estate Planning, Elder Law/Medicaid, Probate & Estate Administration, Special Needs Planning, and Business Succession in Northeast Wisconsin including Appleton, Menasha, Greenville, Kimberly, Neenah, Combined Locks, Little Chute, Kaukauna, Freedom, Hortonville, New London, Clintonville, Oshkosh, Fond du Lac, Green Bay, Ashwaubenon, De Pere, and Waupaca as well as most of Central, Southeastern and Northern Wisconsin.

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