Estate Planning

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Estate Planning: Where There’s a Way There’s a Will

by Alexander Green, Chairman, Investment U; Investment Director, The Oxford Club
Friday, September 7, 2007: Issue # 708

“Rich people plan for three generations. Poor people plan for Saturday night.” – Gloria Steinem

Would you like to protect your family, bring them closer together and have them speak fondly of you, not only today but long after you’re gone?

Good. Start your estate planning now and make a will today… or update your existing one.

With the possible exception of Buddhist monks, most of us don’t spend a great deal of time contemplating our demise.

And it shows. Polls indicate that seven out of 10 Americans have no will. And most of the other 30% haven’t kept it up to date.

If you fall into the former group, let me give you a wake up call. Without a will, you’re saying, in effect, that you don’t care who gets your money and property when you die or who is appointed guardian of your minor children. Either that or you have trouble facing up to your own mortality.

Please don’t tell me “I just haven’t gotten around to it yet.” That’s pretty thin. Especially when you consider what’s at stake…

Include Everything You Own In Your Estate Planning

When you die without a will, a probate court must appoint a representative for your estate. (Yes, everyone has an estate, not just the wealthy.)

An estate is essentially everything you own, from stocks, bonds and mutual funds to old photograph albums, the family piano and your Miles Davis collection.

If you die without a will, the court labels your case “intestate,” a fancy way of saying the state steps in and decides who gets what for you.

This alone should send a chill up your spine. But how about your family? In the midst of their grief, they’re left with questions, uncertainties, possible jealousies and the time-consuming process – which often takes years – of sorting things out.

Don’t they deserve better than that?

As if the emotional toll isn’t enough, there’s also the cost. An AARP report claims that probate attorneys receive more than $1.5 billion in fees annually.

For typical situations, probate can cost up to 10% of the estate assets, including attorney fees, filing fees, and executor fees. Add court costs, appraisals, and extra fees charged for “extraordinary” legal services, and your heirs can watch your estate turn into a few crumbs.

(Recently in New York, $1,600 per hour was deemed reasonable for work on a complex case.)

Here are a few suggestions to begin your estate planning and ensure your heirs make out better than the lawyers in your town.

How to Save Thousands Creating Your Will

If your estate is simple and relatively small, you can create a will yourself using Quicken Willmaker Plus 2007.

This program can help you create a Living Will, Living Trust, Bypass Trust, Financial Power of Attorney and other legal forms. You can make changes to your will whenever you like, without consulting an attorney. (A Willmaker will is valid in every state in the U.S. except Louisiana.)

If you’re interested, you can buy the program at Amazon.com for less than $50. Here’s the link.

If your estate is larger or complicated, you probably need some estate planning advice. For example, if you’re estate is worth more than $2 million, you may be subject to estate taxes, which can run as high as 46%.

It would be nice to think that you could leave this mortal coil unmolested by the IRS. But unless you have the good fortune to expire in 2010 – when the estate tax drops to zero for just one year – that may not happen.

(If you don’t like this, by the way, you should write your Congressman. Tell him “no taxation without respiration.”)

A good starting point for those seeking estate planning advice is David Phillips’ new book, “Estate Planning Made Easy.

I’ve known David for more than 20 years. He knows this subject cold. And the third edition of his book, which was published earlier this year, covers all the most recent estate tax legislation and the best strategies to give your loved ones the security and peace of mind they deserve.

His book is also available online.

Or contact a local attorney and just have them get started. Depending on where you live, you should be able to find one who will draft a will for less than $3,000.

I realize no one looks forward to making a will or planning how their estate will be divided. But, some day, your heirs will appreciate what you’ve done.

And you’ll feel better today, knowing that it’s your final wishes that will be followed – not somebody’s else’s – and certainly not the state’s.

Good investing,

Alex

Today’s Investment U Crib Sheet

More About Protecting Your Assets…

Now that you’re putting a will in place, you’re saving your heirs time, frustration and, frankly, a lot of money. But how can you make sure they get all the money? Leaving as little as possible for the state to collect? Form a trust.

You don’t have to have millions to establish one. Anyone can do it. No matter what the size of your estate is, you will ensure your family is getting as much as what’s rightfully theirs.

The “living trust” is a popular vehicle…

The big advantage of the living trust is that its assets completely avoid the probate court procedures, and it can be used much like a will to direct assets to named beneficiaries. With a living trust, when the grantor dies, it is the trust, not state laws or the courts, which directs the manner and means of final disposition of trust assets.

To learn how to set up a living trust (or any other kind of trust), consider our special report, The Best Ways to Defend Your Wealth with Trusts and Gifts. Our Wealth Protection Advisory Panel has covered absolutely everything you need to know to preserve your assets – the different types of trusts, which is best for you, what to put in them, how they save you money, how to avoid the scams, how to reduce estate taxes…

The report has been reviewed by specialized tax, legal and financial experts, and could significantly change your family’s financial future for the better. To learn more, here’s how to get started.