December 9, 2011

While out driving yesterday, I passed a sign put up by a builder seeking to sell “Estate Homes.”  Despite the fact that I deal with “Estate” matters every day, the builder has succeeded in conjuring up the image they wanted me to see by using the term “Estate”:

White pillar columns in the front of the home, family initials on a gated entrance, German Sheppard guard dogs guarding the perimeter and possibly a butler named Jeeves to greet me at the entrance.

For the most part, I stopped calling myself an Estate Planning Attorney unless I’m speaking with someone who is also an attorney or financial professional.  As someone who deals with the topic every day, I have to remind myself that not everybody realizes what Estate Planning entails.  Moreover, very few people know what it means to have an Estate.   Yet others are under the belief that estate planning is for those who have amassed or exceeded a certain level of wealth.

Follow this mental exercise with me: think of everything that you own or everything that you would leave behind when you are no longer on this Earth.  This can include real estate, investments, business interests, life insurance death benefits, retirement accounts, pensions, jewelry, German Sheppard guard dogs etc. While living, these items are your assets.  When you pass away and they go to someone else, these assets are collectively referred to as your Estate.

An Estate Plan is the planning that you do prior to death or disability which allows you to control your property while living, and to give what you have to whom you want to give.  You can specify when you want it to be received and in which the manner it will be received.  When done properly, it’s also an opportunity to save significantly on estate taxes, provide asset protection, plan for disabilities, as well as to serve other goals.

So who needs an Estate Plan?  Is it someone past a certain level of wealth?  No.   While the amount of wealth will have a bearing on the nature of the plan selected & the strategies used, it is not the sole determining factor of who needs an estate plan.  A person needs an estate plan when they want control who receives their property, when it is received and in the manner in which it is received.  That person can be the person buying the “Estate” home or Jeeves, the gentlemen who greets you at the door.