Goals of Estate Planning

Estate planning is the process of planning for the eventual distribution of assets upon death. Although there are many different reasons to plan an estate, the following general goals are applicable to everyone:

  1. People want to give what they want. They want the flexibility to decide what to give.
  2. People want to give their property to whom they want. They do not like being told that they must include or exclude certain proposed beneficiaries.
  3. People want to distribute their property how they want. They want the freedom to choose the manner in which they make distributions of their property.
  4. People want to distribute their property when they want. They want the flexibility to make decisions for themselves based on the circumstances existing at the time.
  5. People want to accomplish these goals as conveniently as possible and at the lowest possible cost. People generally do not want the asset transfer process to be more difficult than necessary. Nor do they want to pay any more in taxes than is minimally necessary. Thus, the goal is to develop an estate plan that streamlines the transfer process and maximizes the value of property passing to the decedent’s family.

The role of an estate planning attorney is to help the client accomplish their goals. An experienced attorney has various tools at his or her disposal, and an estate can be transferred at death using the following methods:

  1. Last Will and Testament – The benefit of a will is that the testator can direct how he or she would like the assets to be distributed. Within a will, guardians for minor children can be named and language can be included to provide for children until they are old enough to manage assets. Wills, however, require a probate administration for transferring assets.
  2. Joint Tenancy – This type of ownership is one of the most common forms. The benefit of joint tenancy is that assets are transferred automatically to the joint owner upon the first death. However, the assets are then held in the survivor’s name alone and are subject to probate. Also, joint tenancy often does not work well outside of a marriage relationship.
  3. Transfer-on-Death and Beneficiary Designations – These types of designations can be used for various assets, including bank accounts, investment accounts, retirement accounts, life insurance, and real estate. Naming beneficiaries allows for assets to be distributed without the need for probate. Unfortunately, these designations sometimes lack the flexibility that is often necessary in estate plans.
  4. Revocable Living Trusts – Trusts are a time-honored method of avoiding probate. A properly established and funded trust provides all the benefits of avoiding probate and at the same time allows the necessary flexibility to leave assets in the desired manner. For example, trusts can be used to hold assets until children become older and protects assets from the beneficiaries’ creditors.

None of these tools are right in every circumstance. The estate planning attorneys at Clark, Mize & Linville, Chartered would welcome the opportunity to discuss your individual circumstances with you to tailor a plan to meet your needs.

Written by:     Joshua C. Howard

Related Practice Area:            Wills, Trusts and Estate Planning