Keep it Simple
Over the past five years, I have written numerous articles about the importance of having some sort of estate plan in place. During that time, there have been several “out of towners” blast through and offer estate planning services (coupled with free meals, of course). Be aware that the quality planners, who conduct business here every day, charge much less than the traveling representatives, and won’t try to scare you into creating a trust. The job our local estate planners do is accurate, weighs two-thirds less and when you have to make changes, you can still find them, right here, in Hot Springs, Arkansas. So when you decide to get started, stay local. Pick an attorney who has experience in estate planning, pick a trust company that is managed locally and makes decisions close to home, and pick an accountant that understands the peculiarities of trust returns. When the time comes and you need someone that you can still find, as Dorothy once said, “there’s no place like home.”
“Where do I start?” That is typically the first question, and really the simplest, but it is different for everyone, and it still comes down to basics of “Who? What? When? Where? and Why?” You don’t need to know about the tax laws (if they ever get settled), or how to transfer property, or how to plan for a nursing home. Your attorney will take care of that, and please keep in mind, trust officers do not practice law, and you should always be referred to legal counsel when creating or amending documents.
Start with “WHO”! Who do you want to take care of? Anyone can be a beneficiary – your spouse, a parent, children, grandchildren, nieces, nephews, your neighbors’ kids or your favorite charity. You can be as creative as you like. You can also identify “who” inherits your assets beyond current beneficiaries. If one of your beneficiaries should predecease you, you also have the ability to name the next beneficiary (contingent).
Then address the “WHAT”! Usually, the “Who” part is the easiest. The “What” part can become more complicated. Start by making a (1) list of your investments/assets, then a (2) list of your personal items (that matter). If you know “Who,” now just identify “What” you want them to inherit. $10,000? A million dollars? 3%? 20%? If you own it, you can leave it almost any way you want to. If you have personal items that you enjoy, you can leave them to individuals with your list. I have a candy dish that was my grandfathers; it isn’t worth anything to anyone in the world, except me. You can do the same with your things, and writing it down takes a lot of the pressure away from your family.
WHEN? When do you want someone to get something? You can leave everything outright and free of trust. If you prefer, you can leave your assets in trust so they can benefit from it both today and in the future. You have a great deal of control as to “when” an inheritance is distributed (keep in mind there are certain laws that require notice periods to protect heirs and creditors). Otherwise, you have the absolute right to determine “When!”
WHERE? “Where” has a lot of aspects to consider. Where do I want my kids to live if something happens to me? Where do I want to live if I can’t take care of myself someday? Where do I want my money managed? Where do I want decisions for my family to be made?
WHY plan? Most people would never go on vacation without some sort of plan. Planning ahead promotes efficiency, clarity, and protection. The best way to make certain your goals are met is simple – plan ahead.