Estate Planning

Philip M. Flanigan - Estate Planning

When it comes to estate planning, what's not done is often the biggest mistake made. Even people who realize the importance of proper planning often don't have a proper plan in place.

From psychological difficulties in facing one's own mortality to the more mundane problem of simply finding the time, the reasons people avoid developing an estate plan are as diverse as the individuals themselves. Still, nearly everyone—from the wealthy to those of very modest means—can benefit from a well-designed plan.

Without any estate plan in place, federal and state laws dictate how property, personal items and assets are divided, with no regard to the individual's wishes. Conflicts due to family issues and legal problems often result, tying up the estate and slowing down the distribution of assets. Additional administrative expenses and taxes, which must be deducted from the estate, can also reduce its overall value before distribution.

While a Will often serves as its cornerstone, a true estate plan encompasses many more facets and presents a broader picture of your current estate and how it might look upon your death.

In many instances, a trust may be created as part of the plan to specify how assets may be managed during life, at death, and even for generations beyond. Other documents, such as powers of attorney and health care powers, which specify who may act on your behalf in legal, financial and medical matters, if you are unable to do so, should be included.

An estate plan can serve as a road map, guiding you to the goals you would like to achieve.

The estate planning process is different for every individual. Not everyone is in the same life stage, nor do they have the same objectives and income needs throughout life. As individuals grow older, their goals may change, but at any stage in life, most individuals want to manage risk, accumulate assets and preserve assets with their estate plan.

Establish Goals and Objectives

In order to transfer the majority of your assets and wealth to specific beneficiaries, property must be distributed without conflict, administrative expenses and taxes must be reduced and payment of unavoidable estate expenses must be made quickly.

  • Distribution Without Conflict—Your distribution objectives should be centered around how you want to distribute your property. And the broad definition of property includes more than just real estate. It includes your financial and tangible assets as well. Once you have decided how you want to pass on your possessions, evaluate your current ownership situation. Throughout your life, you should revisit your property ownership to make sure that it is not in conflict with your distribution objectives.
  • Reduce Expenses—Another goal of your plan should be to reduce expenses. Specifically, a good plan will look for ways to reduce estate taxes and avoid probate taxes while still meeting your distribution objectives. Estate planning is an ongoing process that attempts to preserve assets so that they may be passed on to your survivors according to your wishes.
  • Pay Expenses Quickly—The final goal of estate planning is to make sure sufficient funds are available to pay estate expenses when they are due and to pay them in the most efficient manner. Accomplishing this increases the chance of your estate being distributed to beneficiaries in a more timely manner.
  • When constructing your estate plan there are three major concepts to keep in mind. You should calculate the assets you own and determine the type of ownership associated with it. You should evaluate what kinds of property transfers you want to make before and after your death. Finally, you should become familiar with how estate shrinkage occurs and the kinds of death and estate taxes that exist.


©2011 Phillip M Flanigan Attorney at Law