A couple of days ago I received an email from a realtor who I recently met who had a question about estate planning.  Her question was: What level of assets do your clients need to own before your services benefit them?

After I responded to her question, she told me that the information was very helpful because she now understood why proper estate planning is so important for practically everyone.  Her response encouraged me to post my answer to her in this article.  As you will see from the following answer to her question, most everyone needs estate planning, or elder law planning, as some level – regardless of the value of your assets.

Here is my answer to her question:

Hi —–,

Nice to hear from you.

Our clients span a pretty good range of assets depending on the nature of the matter we are handling for them. In the Medicaid planning area, most of our clients have $50,000 to $400,000 in assets that they want to preserve from nursing home spend down.  Usually we are able to help most of them keep about 80% to 90% of those assets and still get nursing home care.

In the estate planning field, our clients range from young couples with virtually no assets (but who have minor children for whom they want to provide protection of life insurance and retirement funds for the benefit of the minor children if both parents are rendered incapacitated or die), to hundreds of millions of assets.  The size of an estate is really relevant only to the issue of estate taxation, which drives the planning in a certain direction to work on reducing estate taxes.  Most of our clients do not have a taxable estate ($5.25 million for an individual, $10.5 million for a married couple).

The objective of estate planning is to make sure that your assets, at whatever level, benefit those you want to be benefited. When you have minor children that is critically important because minor children cannot own assets.  If proper planning is not accomplished for the family that has minor children, if something happens causing the death of both parents (auto accident usually), the life insurance and retirement benefits, and all other assets, are required to be placed under the control of the Court through a court appointed guardian.  It’s a very expensive process and requires court approval for expenditures to benefit the children.  Court approval means the attorney for the guardian must attend court and obtain that approval. It is not always given because the presiding Judge may have a different opinion about what is good for the children.  By doing proper planning, you can establish trusts that allow the parents to choose who is going to manage the assets, and who is going to care for the children.  Absent a will designating who will be the guardian of the children, the court will choose from competing family members.  I can assure you, nothing creates ill will among family members more than a fight over who is going to raise the minor children of deceased parents.

Proper estate planning allows parents with adult children, as well as minor children, to provide some control over how the assets are distributed to the kids. Sometimes kids have spending issues (i.e., no restraint free wheeling spending), sometimes kids have spouses who have the same problem, or the marriage is week and the objective is to protect the assets from going to a divorcing spouse, or perhaps one or more of the kids has special needs and receives government benefits.  The distribution of an inheritance to someone receiving government benefits usually will render them ineligible for the government benefits program and can very adversely affect their medical well being and their economic sustenance.  Through the use of properly drafted trusts, we can effectively take care of all of those issues in the manner the parents think best.

All of these issues become more problematical with most blended families.  When there are children from previous marriages, the planning issues just get more complex.  Both spouses usually want to ensure that the other spouse has appropriate financial support after the death of the first spouse.  But, both spouses are also keenly interested in making sure their own children receive their appropriate inheritance at the death of the surviving spouse. Those issues are very touchy for most blended families. Utilizing joint ownership and beneficiary designations will lead to problems in almost every case.  We’re dealing now with a situation where a husband died leaving a former wife, children with the former wife, and a second wife who was married to him for 12 years.  He never changed the beneficiary designation on his life insurance policy, so it is going to his children and former wife, leaving no life insurance for his widow.  There is substantial evidence he never intended to leave several hundred thousand dollars to his ex-wife, but guess what, his ex-wife doesn’t care what he wanted and has refused to discuss turning any of it over to the widow.

Proper planning can deal with these types of issues, where the parties want to provide for them. Some people also have charitable inclinations, even if they don’t have a lot of assets.  We can help design the most effective way for a person to provide the maximum benefit for their favorite charities, without negatively impacting their financial security during life.

So, there are lots of reasons for someone to visit an estate planning and elder law attorney, regardless of the level of their assets. Hope this answers your question.

Let me know if you’d like more information.


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