When should you consult a lawyer with your estate planning questions? In all of the following situations, the engagement of an attorney before the event is the most efficient way of minimizing both emotional and financial stress.
These 10 scenarios are not exhaustive and completely ignore the need for legal counsel in any criminal situation. If the police or a regulatory agency are involved, the need for a lawyer at the outset should be absolutely recognized by everyone. The following examples are of less dramatic times in life, but do describe common occurrences in the lives of senior citizens, as well as the general public when the engagement of legal counsel is important.
1. Birth of a grandchild. Grandparents are more likely to look for financial gifts rather than baseball gloves and ice skates. Substantial gifts to a trust for the grandchild or gifts under a state uniform gifts to minors act can start a financial plan for the grandchild and also reduce the taxable estate of the grandparent. A lawyer can provide advice as to what form the gift should take, whether as a simple custodian gift, a gift to a customized minor's trust, or even a gift of a limited partnership interest in a family limited partnership.
2. Engagement to be married. When previously married persons decide to marry, a prenuptial agreement can purposefully set out what benefits each will receive when the marriage is dissolved, either by death of a spouse, or by separation and divorce. Although the process is emotionally taxing, going through it before the wedding is far better than leaving it up to the children to deal with when one partner dies.
3. Marriage itself. At this point, the husband and wife should review their old wills and trusts and write a new one to conform to their prenuptial agreement, and their current wishes for the disposition of their estates. For widows and widowers, as well as divorced persons, there is a new opportunity to take advantage of the marital deductions available for gifts during life and by disposition through a will or trust at death. 4. Sale of one home and purchase of a new house. Consulting your lawyer before the purchase and sale contract is signed is the most economical and efficient way to prove for a no-hitch sale or purchase. The lawyer should advise regarding the terms of the sales contract, the way title to the new home is to be taken and the advantages of claiming a homestead estate in the new home. The ownership of the home should be consistent with the couples' wills and trusts, and the correct division of their assets under their estate plan and prenuptial agreement. 5. Purchase of life insurance. At or after retirement, there are often life insurance policies that either end or which can be taken over by the employee. Many times it is possible to keep the proceeds of life insurance out of the taxable estate of the insured through the use of irrevocable insurance trusts. The lawyer can advise regarding the form of transfer and new ownership of the insurance policies.
6. Attaining age 70. Shortly after attaining age 70, an IRA participant must begin to withdraw funds from his IRA and pay taxes on the withdrawn amount. Before committing to any one plan, a review with the estate-planning lawyer will examine the many options that are available for taking required minimum distribution from the plan. Do I need a will? This is one of the most frequent questions posed to any writer or practitioner in the estate-planning field. In some cases it may not be an absolute necessity to have a will, but there still may be compelling reasons for executing a will. 7. Sale or purchase of a business. The form of the contract for the sale of business, and the manner in which the business is owned and sold can have far reaching and important tax ramifications in terms of the recognition of capital gains on the sale, and the valuation of any parts of the business that are not sold by the time the owner dies. 8. Serious illness. Everyone, whether or not he or she is a senior citizen, should be aware of the fact that having a health care proxy/living will and a durable power of attorney can eliminate much unhappiness, confusion and distress that will confront the family if the same documents are needed because of a serious illness, and it is too late to have them prepared.
9. Any possible litigation. If any possible claim against a person is in the future it is urgent that he or she have professional advice from the first instance in which the possible litigation is anticipated. 10. Vacations. Untold numbers of wills and trusts are written upon the prompting of a spouse just before taking a vacation trip. The possibility of not returning pushes people into making the plans that everyone should have. It is unfortunate if the plans are made to hurriedly, so well before the plane leaves one should schedule ample time to discuss, draft and sign wills, trusts, living wills, durable powers of attorney and the like. Obtain good, competent professional advice and have a great trip as well as a rewarding retirement. Attorney Alan S. Novick is a wills, trusts and estates lawyer.Source: Scripps Howard 2004 Scripps Howard News Service. All Rights Reserved.
Source: Money & Work
