Making The Plan

[For definitions of the legal terms used here, please visit our Glossary page]

Making the plan consists of determining what you wish to have occur with your assets -- their ultimate destination after your death -- and what you wish to do to ensure that your beneficiaries are helped along their own life path by your estate plan.  Your estate plan should not have as its goal the slavish distribution of all assets to certain beneficiaries in exactly equal shares.  You should determine:

1. what is best for yourself and spouse, if any, during life; and
2. what is most equitable for your beneficiaries.

Your plan must reflect your comfort level.  Some clients are willing to take more risk than others: in dealing with the I.R.S., in giving free rein to children, in providing for their own future needs.  Your planning is not simply the mundane application of legal principles to assets and distribution; it is the outworking of your own life philosophy and the interweaving of your hard-earned family wealth with the dynamics of individual and family life.  People, with all of their eccentricities and unpredictability, are the warp and woof of estate planning.  Tax considerations and monetary concerns must take second place to the people involved.

Provision for yourself and your spouse may require the expenditure of assets in a way that precludes the granting of large bequests to your children or other beneficiaries.  There is no contradiction between caring for yourself and giving to your children.  Your first priority should be to live, and live comfortably, to the extent possible.  You have worked (or will have worked) all your life to accumulate the assets for which you plan, and there is no selfishness in enjoying the fruit of your labors.

After making provision for your own reasonable needs, including the use of insurance, to the extent necessary, you should consider distribution to your beneficiaries.  This distribution should not be equal, necessarily, but rather equitable. 

That means that the child who has worked to further the family business, while the other children pursued careers of their own, should not be forced to give up the fruit of his or her own hard labor in order to give all children an equal share.  An equal distribution would not be equitable.  The equitable distribution would give a larger estate share, or a larger share of the business, to the working child.

You should also consider the special needs of your children.  Health problems, handicaps, and known propensities (such as being irresponsible with large sums of money), as well as disparate needs between, for example, a well-off professional child and a struggling married child with many children, will lead you to different plans.

Family issues also demand attention in the formulation of your plan.  Couples who are undertaking a second marriage, when one or both of them have children from the first, plan very differently from couples who are still on their first and only marriage after forty years.  Many clients are concerned about the access children-in-law might have to monies given to benefit a child, and are worried that a divorcing child-in-law might take a portion of the inheritance given to the child.  If these issues are present in your family, they will impact the type of planning you undertake.

You should also consider including your favorite charity or charities in your estate plan.  It is our experience that the satisfaction of benefiting your local church or synagogue, or furthering some worthy cause with which you have been affiliated during your life, can be multiplied greatly by making a simple bequest n your will or trust to further the goals to which you are now dedicated.

An example of a plan is: 

After the death of the second of us to die, (1) to make a gift to our local church in the amount of ten percent of our estate; (2) to transfer the family business to Jenny and Scott, who have worked in the business, and also to give them an equal share of the personal property and ten percent each of the cash assets in the estate; and then (3) to give the home, other remaining assets, and insurance proceeds to Molly and Mike.

After you have considered your plan, write a succinct version of it on a sheet of paper, and bring it to your meeting with your planner.  We pride ourselves in our ability to recognize the personal issues involved in the planning process, and to plan for the people.

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