Estate Planning Self Assessment Questions

By: Jim Dossey, MS, MBA, JD -

We often ask the following questions to determine if a client needs estate planning and if so, what tools are avilable to meet their needs.

Question

Why We Ask the Question

What are your goals with respect to your estate?

Here, we are looking for any of the following:

  • Charitable intent
  • Protection of children from mismanagement of their inheritance or bad marriages
  • Business succession
  • Asset protection for self or beneficiaries
  • Probate avoidance
  • Disaffection with a beneficiary
  • Taking care of a special needs family member

Are you married? Do you have children? Are the children from a previous marriage?

Accounting for children from a previous marriage and children from a current marriage often involves complex estate planning. These situations frequently result in our most complicated Wills and Trusts.

What are the ages of your children?

We will often suggest a contingent trust in the Will if under the age of 25 or 30. A child under the age of 18 cannot directly inherit property; in this case, the property will be put into the court registry or in a guardianship of the estate, both of which should be avoided if possible.

On the other hand, it is very important to document the guardianship of the person in your Will for each of your children.

Do you have a Will or Trust?

  • When was it written?

We often suggest that we look at Wills > 5 years old, although they often are OK. That being said, laws do change over time; we have seen sigificant change in estate tax rules over the last few years.

What is the size of your estate?

  • If > $1MM, chances are that they will need something more than a simple Will
  • If > $3MM, we will consider tax planning as part of the Will

Do you have property in multiple states?

Indicates possible need for a inter vivos trust to avoid the extra hassle and expense of probates in multiple states.

Do you have possible special needs beneficiaries?

Indicates possible need for a supplemental needs trust. People with special needs who are receiving government benefits are subject to very strict income and asset limits. A supplemental needs trust can help provide for special needs beneficiaries while preserving their government benefits.

Do you have a 401k, IRA, or insurance policy?

If so, these need to be coordinated with the Will or Trust. Unless the beneficiary designations are coordinated with the Estate Plan, they will not pass through a Will or Trust.

Are you concerned about possible creditors or bad marriages for your children or other beneficiaries?

Indicates need for a lifetime descendant's trust in the Will for the children.

Do you have a large asset that you want to stay in your family and not divided up after your death (i.e. family farm)?

  • Indicates need for a business entity to hold the asset
  • Also indicates possible need for life insurance (or irrevocable life insurance trust, aka ILIT) for payment of estate tax

Do you have charitable intentions for the distribution of your estate?

If the client intends to provide for charity, then they must have a Will or Trust. The default rules provided by the State of Texas do not account for charitable gifts. Additionally, there are good ways and bad ways to make a charitable gift that must be planned for.

Do you expect to have unusually large income in a particular year (i.e. IPO, buyout of company, large inheritance, etc.)?

Indicates possible need for Grantor Charitable Leads Trust

Do you have significant assets, but need a steady stream of income from those assets

Indicates possible need for Charitable Remainder Trust

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