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The
Three P's of Proper Estate Planning
Quick.
If you were incapacitated or died today, what would
happen to your loved ones and your property? Who would assume
responsibility to make sure everything was okay? How would
anyone know your plans for the care of your loved ones and your
property?
Even if you have answered these fundamental
questions through proper Life & Estate Planning, it is
important to review your answers periodically, because they may
change over time. To help ensure that your review is thorough,
remember to cover the 3 P’s of proper Life & Estate
Planning: People, Property and Plans.
Your
People
From the time we are born until we die, our life
experience is enriched by the relationships we develop with
other people. Truly, none of us is an island. Who are the
important people in your life right now? Depending on your
unique circumstances, your list may include your spouse,
children, grandchildren (even great-grandchildren), parents,
siblings, nephews, nieces or friends. Beyond these, your
important people also may include religious and non-religious
charities. And be sure to remember any pets, whether they have
feathers, fins or fur.
Your
Property
In addition to collecting
relationships with other people during our lifetime, we tend to
collect relationships with property along the way. In this
context, property encompasses more than just real property (i.e.
real estate), including all of your assets regardless of form.
What property have you accumulated? Have you inventoried and
valued your things?
Your
Plans
The foundation of every
comprehensive Life & Estate Plan is the selection and
appointment of your successor decision-makers to make your
personal, health care and financial decisions in the event of
your incapacity. Likely such successors would continue to manage
your property following your death, as well. Who have you
appointed as your successor decision-makers? Do they have the
time and expertise to serve? Would it be wise to appoint
professional assistance to help them with the details? Perhaps a
professional successor decision-maker, such as a trust company
or a certified public accountant, is more appropriate given your
unique circumstances.
Issues surrounding the division and distribution of
property can shipwreck family relationships upon the death of
the property owner. Do you have sentimental, one-of-a-kind
items? A recent study found that most family fall-outs result
over the failure to make legal arrangements for such items.
Do you have a family business? Two-thirds of family
businesses fail to survive the exchange from one generation to
the next largely, because they have no succession plans. Who
among your children will inherit your business? What
arrangements have you made in your Life & Estate Plan to
make sure your other children are treated fairly, if not
equally? Does your Plan discourage or even prevent conflict
among your heirs?
Is your family a blended family? If so, did you and
your spouse execute a Pre-Marital Agreement regarding the
treatment of your property upon your death? If not, how will you
honor your vows to provide for your surviving spouse and still
fulfill your desire to provide an inheritance for your own
children from a prior marriage? Does your Life & Estate Plan
protect any inheritance left for your surviving spouse from
their next spouse?
Divorces, lawsuits, bankruptcies and affluenza have
become rather common threats to inherited wealth and, like
lightning, can strike without warning. Does your Life &
Estate Plan protect any inheritance both for and from your
children?
Given the certainty over the uncertain future of the
death tax, does your Life & Estate Plan contain the
necessary flexibility to achieve both your tax minimization
goals and your non-tax goals? If not, the IRS may be one of your
heirs.
Summary
The failure to make and
maintain proper Life & Estate Plans for the important people
in your life and for your property can lead to family fall-outs,
litigation and other unpleasant, unintended consequences.
Copyright © 2005 Integrity Marketing
Solutions. All rights reserved. Some artwork provided under license
agreement. This publication does not constitute legal, accounting or
other professional advice. Although it is intended to be accurate,
neither the publisher nor any other party assumes liability for loss or
damage due to reliance on this material.
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