Your Estate Plan: Ideas You Can Really Use

By Earl H. Cohen, Attorney at Law

The Most Common (and Useful) Estate Planning Techniques and Tools

Welcome to the next edition of Your Estate Plan, a series of articles on estate planning and planned charitable giving. Regardless of your age or the size of your estate this series of articles will present practical information and ideas you can really use in planning and keeping your estate and charitable giving plans up to date. Future topics will include proper use of beneficiary designations, and living trusts.

We previously discussed estate planning as a continuing process involving planning for the transfer and management of assets after death; planning for the management of health and financial affairs including business interests in the case of incapacity; planning for the protection of assets during lifetime and for the lifetimes of beneficiaries; and, possibly most important of all, planning for the legacy you leave behind for your family, your community and those charities that are important to you and your family.

While the actual use of estate-planning techniques and tools may differ between estate planners, there are 10 common techniques and tools used in effectively planning most estates.

• Wills: Wills serve as the basic tool of every estate plan. Wills provide direction for the distribution of property, appointing the personal representative (executor) who will administer your affairs after your death, and, if you have minor children, who will serve as their guardian.
• Trusts: Trusts play a vital role in providing a vehicle for the effective management of your affairs during your lifetime and for the lifetime of your spouse, children and other descendents. Trust can also play a role in providing probate avoidance and tax planning.
• Powers of attorney: Powers of attorney allow for the continued management of your affairs during absence and periods of incapacity as a result of illness or accident.
• Advance health directives: Advance health directives provide for appointment of the person or persons who will speak for you in directing your health care if you are unable to do so and may provide specific directions on management of your health care.
• Retirement plans: Retirement plans, including 401Ks and IRAs, can be used to effectively provide long-term financial security for you and your family, and as a lasting legacy for your congregation and other charities important to you.
• Lifetime gifting to individuals: Lifetime gifts to family members and friends can provide a reasonable means of reducing your estate for tax purposes, and, at the same time, can provide the enjoyment of observing the benefits reaped by your beneficiaries.
• Charitable gifting: Charitable gifts can help worthwhile causes while providing you with income tax and estate tax advantages.
• Insurance planning including property, casualty, liability, health, disability, life and long-term care coverage: Careful insurance planning is essential to managing your family's risks and preserving your hard-earned wealth. Such risks include losses resulting from negligence, illness or accident resulting in incapacity, as well as death of an important breadwinner or business owner.
• Liability limiting, tax passing through entities: Such entities include limited liability partnerships, limited liability companies, corporations and limited partnerships. Use of these entities is a must for those holding investment real estate and business interests.
• Business continuation and succession agreements: For clients with business interests, business continuation and succession planning and agreements are vital to insure proper coordination with their estate plans, including plans for minimizing the effects of federal and state estate tax.

While a full discussion of each of these techniques and tools is beyond the scope of this article, feel free to contact us for easy-to-understand monographs.

Watch for next month's article "The Use of Beneficiary Designations as Part of Your Estate Plan."

For further information on how these and other estate planning techniques may apply to your situation or your charitable planned giving strategy, feel free to call Earl H. Cohen or Jeffrey O'Brien at 800-4016-194.