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Now . . . As for the Planning of Your Estate

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When planning a married couple's estate, it is easy to focus on the tax issues involved and overlook important practical issues. While most clients would like to save taxes, if they really thought about it, most would probably say avoiding family conflicts and protecting the surviving spouse are higher priorities than tax savings. An estate planner's task is to elicit these wishes and draft documents which are the most likely to achieve their goals.

This paper discusses some of the ethical issues involved in planning a married couple's estate, examines some common estate planning techniques from the perspective of the surviving spouse and suggests alternative techniques which offer greater protection to the surviving spouse while still achieving some or all of the tax planning objectives.

Here's the story of a lovely lady who was bringing up three very lovely girls. All of them had hair of gold like their mother, the youngest one in curls. It's the story of a man named Brady who was busy with three boys of his own. They were four men living all together, yet they were all alone until one day when the lady met this fellow, and they knew that it was much more than a hunch that this group must somehow form a family. That's the way they all became the Brady Bunch.

Mike Brady was widowed with three sons (all minors): Greg, Peter and Bobby. Mike married Carol, a divorcee with three daughters (also all minors): Marcia, Jan and Cindy. Mike and Carol had this 70ish idea that they could merge their families into one big, happy family, with all six children treated as the children of both parents.

Mike and Carol Brady came to see you in 1986 for estate planning. Things had been going quite well for the Bradys at the time, and it appeared likely that their combined marital wealth would probably exceed $1.2 million in the very near future. Fortunately, they came in to see you, a young estate planning attorney, shortly after you returned from that year's Advanced Estate Planning and Probate Law Course, and you were equipped with several good estate planning ideas.

After your skillful explanation of the tax issues involved, and based on your energetic recommendation that they should take advantage of the tax savings afforded by credit shelter planning, Mike and Carol ask you to prepare pour-over wills for each of them with the following features:

When the Bradys come in to sign their new wills and trust document, Carol is a little concerned about all the complex tax and trust language in the will not to mention the 30 page trust document. Mike gives Carol a dirty look, and you are afraid that there may be an ugly scene. Quickly you smooth over the waters by explaining to Mike and Carol that these bypass trusts are just like outright dispositions, but with the added advantage of tax savings.

Seven years later, in 1993, Carol Brady calls you. She reports that Mike Brady has passed away (there were some nasty rumors about AIDS, but she assures you he had colon cancer) and that she needs to know what to do. The first thing you do is dig out your copy of Mike's pour-over will. Sadly, it doesn't look anything like your current wills. Still, it doesn't look too bad, and in due course you lodge Mike's will at the county probate court, file the tax return (there is no tax due because of the optimum marital deduction plan), fund the bypass trust and send Mrs. Brady on her way.

Within six months Mrs. Brady has come to see you again. (Funny, she doesn't look so bright and cheery now.) It seems that she is having trouble with her children. Ever since Mike died, she has been estranged from Greg and Peter. Bobby is the only one of Mike's children who is still on speaking terms with Carol, and he's a twenty-something year old who is jobless and still living at home. Peter is now a lawyer, and he's been peppering Mrs. Brady with letters demanding information and accountings. Mrs. Brady says she has decided that the whole tax savings thing isn't worth it, and that she just wants to undo the bypass trust and make out new documents leaving everything to her daughter Jan. After much prodding, you learn that Marcia (who has moved to Mount Shasta and changed her name to "Glistening Stone Under Falling Waters" and Cindy (who apparently has developed into something of an actress and dancer performing under the stage name "Sin-dee") have fallen into disfavor. Mrs. Brady is especially interested in terminating the trust, since she lost a good deal of "her" money by investing in a failed fern bar called "Flowers and Friends."

What advice do you give Mrs. Brady?

Let's turn the clock back to when Mr. and Mrs. Brady first came to see you about estate planning. What were the Bradys' estate planning goals? What effort did you make to discern if Mr. Brady's goals and Mrs. Brady's goals were the same? What did you do to assure that the plan you devised met the Bradys' goals? What steps did you take to protect yourself from later problems with the plan? What liability do you face as a result of preparing the Bradys' estate plan?

First, let's start with what appears to be a simple question: Who was your client when you prepared the Bradys' estate plan? Mr. Brady? Mrs. Brady? Both Mr. and Mrs. Brady? The Brady family? Most of us would probably say that our clients were both Mr. and Mrs. Brady. Hopefully we used an engagement letter which addressed this issue, although most of us probably would find few engagement letters in our 1986 estate planning files.

The "Human Side" of Estate Planning

 Introduction - by Samuel T. Swansen

This issue of The Strategist speaks to the human side of lifetime and estate planning.  It reminds us of what I call the “Planning Pyramid”, a series of building blocks designed to get one’s planning priorities in order.  The foundation block is “me”.  Plan for me.  The airlines have it right: in the event of a loss of pressure, oxygen bags will descend.  Put yours on first before helping someone else like the child next to you.  The point is, if you run out of air, you won’t be of much help to others.  So it is with planning, the client and his or her abilities to generate wealth is the engine that drives the plan.

The next block is planning for my family. How to take care of them in the event of the disability or death of “me”.  The revocable living trust is the ideal vehicle because it can help in both situations.  Even though we are living longer lives today, our exposure to long term disability is increasing.  The revocable living trust can better deal with that.

The next blocks involve protecting my assets and increasing my wealth, and this is where the financial advisor on the client’s planning team can be most helpful.  Of course, there are legal devices that can help with the asset protection side such as domestic family limited partnerships or offshore trusts.

Finally, there is the topic of saving taxes and expenses.  This is the capstone of the Planning Pyramid and its place is important:  it's only the top of the pyramid:  if you go for tax savings first, you will be turning the pyramid upside down, a most unstable structure.  Moreover, with the proper placement of the solid “me” base on the ground, the current discussion of the possible repeal of the federal estate tax takes on some perspective:  the remaining issues will be with us: me, my family, and  protecting and growing wealth.

The article also points to the importance of long term care insurance for those who wish to preserve assets and avoid the financial impact of nursing home care.  In addition, in the Philadelphia area, Delaware and parts of New Jersey, the Friends Life Care at Home? program is available which brings the benefit of a life care contract to people who wish to grow old in their homes.  The wiser ones recognize that some not-so-nice things can happen to you as you grow older, and so they make provision for these problems.

The third line of defense against long term care costs, is the campus-style life care community which offers a full range of services and perhaps, more importantly, companionship to elderly, single people.

The "Human" Side of Estate Planning

Estate planning guides often begin by discussing the intricacies of wills and trusts, probate rules, and estate taxation. Buried somewhere in the middle of the book you might find a section on the "human side” of estate planning. But this subject ought to be covered in chapter one. After all, isn’t the human element what estate planning is all about? 

Avoiding probate and minimizing estate tax is important, but it’s not the objective. The goal of estate planning is to prepare for your retirement, provide for your family, ensure the survival of your business, and/or simply to “make a difference.” Investment, tax, and legal strategies are merely tools that can help you achieve these objectives in the most cost-effective manner.

Here are a few issues to consider as you review your estate planning goals.

Lifetime Issues
Does you plan allow you to live comfortably after retirement without depleting your estate?

Have you planned for potential long-term health-care needs (e.g. retirement or nursing home facilities) for both you and your parents? How will you pay for long-term-care expenses? Do you need long-term-care insurance?

If you become terminally ill or incapacitated and are unable to speak for yourself, how will critical medical decisions be made and by whom? A living will and/or health care power of attorney addressing “right to die” and other medical issues can ensure that your wishes are carried out and that your estate isn’t drained by extraordinary medical expenses. It also relives your family of the burden of making these decisions for you.


Have you fully disclosed your intentions to your estate planner?

What will you leave your heirs? Who will enjoy the benefits of your life's work? Do they need and/or want these benefits? There's no need to guess: Discuss your plans with them.

Be sure your heirs understand your motives. Perhaps you wish to teach your children the value of hard work, so you're providing them with a modest inheritance and leaving the bulk of your wealth to charity. To avoid misunderstandings, communicate this to them through discussion, letters, or even a personalized will.

Making Your Mark

Your assets aren't the only things that make up your legacy. Take this opportunity to share your philosophies, values, business advice, and other guidance. There are many ways your estate plan can make a difference, including:

  • Letters to family and friends expressing your philosophies, values, morals principles, etc.
  • Donations to charitable organizations.
  • Anatomical gifts.

The Best Things in Life are Free

Estate Plans tend to focus on money and property, but in many cases the things that can't be assigned a monetary value are equally or more important:

If you have young children, does your estate plan address guardianship issues?

Who will revive photographs, papers, memorabilia, and other "priceless" items?

Other Considerations

Who will be the executor of your estate? A family member may view this assignment as an expression of your trust and confidence in him or her. On the other hand, it may prove to be an enormous burden during a difficult time. A professional executor may be better able to deal with complex tax, valuation, and other issues.

Express confidence in your spouse and heirs by giving them some control over financial matters.

Never attempt to substitute money for love.

Copyright © 1998-2002 by Samuel T. Swansen, P.C.

[End of Article]

 A primary purpose of estate planning is to distribute your assets according to your wishes after your death. Successful estate planning transfers your assets to your beneficiaries quickly and usually with minimal tax consequences. The process of estate planning includes inventorying your assets and making a will and/or establishing a trust, often with an emphasis on minimizing taxes. This pamphlet provides only a general overview of estate planning. You should consult an attorney, para-legal or perhaps a CPA or tax advisor for additional guidance.

Do I Need to Worry?

You may think estate planning is only for the wealthy. If your assets are worth $1,500,000 or more, estate planning may benefit your heirs. That’s because generally taxable estates worth in excess of the amounts in the chart below may be subject to federal estate taxes, with rates as high as 45% to 55% of the taxable estate.

Adding up the value of your assets can be an eye-opening experience. By the time you account for your home, investments, retirement savings and life insurance policies you own, you may find your estate in the taxable category.

2002 $1,000,000 50%
2003 $1,000,000 49%
2004 $1,500,000 48%
2005 $1,500,000 47%
2006 $2,000,000 46%
2007 $2,000,000 45%
2008 $2,000,000 45%
2009 $3,500,000 45%

Even if your estate is not likely to be subject to federal estate taxes;  estate planning may be necessary to avoid the nightmare of Probate and ensure your intentions for disposition of your assets are carried out at the time of your death.

 Taking Stock

The first step in estate planning is to inventory everything you own and assign a value to each asset. Here’s a list to get you started. You may need to delete some categories or add others.

Once you’ve estimated the value of your estate, you’re ready to do some planning. Keep in mind that estate planning is not a one-time job. There are a number of changes that may call for a review of your plan. Take a fresh look at your estate plan if:



There are many reasons people have for NOT completing any type of estate planning- and none that are really justified. The first is the simple aspect that the filling out of (even the discussion of) will and trust documents makes many people aware of their own mortality. By not doing anything, they do not have to think about the inevitable. This attitude is expressed quite frequently by men. It's not an issue of WHEN they will die, but IF they will die. Women tend to be more objective. But the true issue is not about the one to die, but how the LIVING have to face their future when a loved one is gone. It is this main issue where clients must be objective. If proper planning is not done, surviving spouses and children may be left with inadequate funds on which to survive. Additionally, they may be left with a legal quagmire which must be processed through the court system. This necessitates substantial and unnecessary time which unquestionably will weigh heavily on the survivors and extends the period of grieving.

However, even if there are no direct relatives, a will or trust is still recommended since it can designate that assets are to be left to non relatives or to certain charities. This is what clients are actually planning for- the proper enrichment and survival of their close beneficiaries and/or the continuation of their good will and works past their own lifetime. Many times, people are remembered for the last acts we do and it certainly would be nice to be remembered for the issues of caring and generosity.

Another concern for not doing anything is the fact that many people feel they are being coerced into a plan only to save money for their beneficiaries (children). In some cases this may be true, but most of the time it is a sincere effort for proper planning that all must consider. Parents should not unilaterally dismiss the comments of their children or friends as pure greed, but as an opportunity to put affairs in order and keep the court system (probate) from continuing the period of grieving any longer than necessary. And in truth, planning can reduce the extra burden that estate taxes can impose on estates over $1,500,000. With the use of trusts, this savings of taxes can enrich the beneficiaries- but is that necessarily wrong? Better them than the government.

A third reason why people may not consider an estate plan is that they do not believe they have enough assets to warrant the use and cost of trusts or similar measures. There are two areas to address. The first is adding up current assets to see if they are already over the $1,500,000 "LIFETIME" exemption since estate taxes effectively start at this point. Even if the value of assets is not that high, the compounding effect of inflation over just a few years can easily increase the total value over the exemption. For example, many homeowners have had significant increases in the value of their homes the last 10 years (Sacramento County, California saw a 14% increase in 2003 alone.). Add this to the amount of assets in IRA's, pension accounts, stocks, etc. and the amount may exceed the $1,500,000 exemption from estate tax.

Parents have also been heard to say "Well, we earned this money the hard way and the kids will have to become successful on their own" and "I don't care how much the IRS will take". Rubbish. Almost universally these same people did whatever they possibly could while earning their fortunes to have their assets escape tax whenever possible. Parents may be unwilling to do planning for their children for any number of reasons, but there is absolutely no sense, as stated above, in letting the IRS take a huge amount of those assets. Certainly everyone can find a charity to benefit- Heart, Lung, Cancer, etc. and reduce or completely eliminate the tax bite. That is certainly better then having the assets taxed as high as 55% and giving it to the government to buy hammers for $200.

One other reason for not doing planning- and one which is unfortunately understandable- is the fear of attorneys. Consumers see, sometimes justifiably, attorneys as heartless greedy people that file tons of paper that no one can understand. However, this cut throat competition and aggressiveness is tempered somewhat in estate planning because the attorneys are not in a combative situation nor subject to court room in-fighting and legalistic ploys. Estate planning is a fairly personalized and civilized process where the estate planning professional (preferably and hopefully) engages in a one on one discussion of needs and desires. These attorneys, paralegals, etc., by their training and work, are usually much more compassionate and understanding of the emotional and financial issues involved and treat the issues and clients with respect. Unfortunately, the documentation clients receive is still very imposing and loaded with legalese. The estate planning professional needs to explain, in simple English, what the document really means and how everything works. Some may provide separate letters explaining the material. (Unfortunately the issue of cost becomes a major factor once again. If an attorney is charging minimal fees, there usually are no separate letters of explanation- nor little commentary either. It is incumbent on clients to make sure, by whatever means, that they understand what they are signing and how it works.


The "supposed" reasons for not doing planning were put first in order to get the emotional rationalizations out of the way. Consumer's needs to do estate planning are several fold. First, it is necessary to determine who will receive assets when someone dies- and as expeditiously and economically as possible. Additionally, some clients may wish to put assets under current management either through powers of attorney or living trusts. They may wish these managers/trustors/attorneys to become intimately familiar with the assets and to potentially manage the assets after their demise as a going business- or at least to distribute them in an orderly manner to the beneficiaries. In order to effectuate this proper transfer, they need to establish at least a will, durable powers of attorney and perhaps testamentary or living trusts.

Of particular concern, and which most texts and writings seem to have overlooked, is the need for basic planning to keep the time of grieving to a minimum. That usually is in regards to "unnecessary" probate. For small estates and under certain conditions, probate may not be a problem and the cost may be incidental. (In California, if assets are $100,000 or under, formal probate is not necessary.) In other situations, probate may actually be beneficial since the court will oversee all aspects of the distribution of the assets (but it also makes the assumption that court officers, attorney and judges are well versed in investments, valuations, etc.- something the author is not willing to grant). It also can keep creditors from attaching assets after a statutory period of time. However if there is one area where things can go wrong and thereby cause continued emotional drain, probate is it. The cost of probate may not be the issue- it's the time element stretching into years that is the concern. These are the comments repeatedly expressed by people who have had to act as executor and executrix on estates. As an example; there were three sisters, all living in different states, who had hoped to close their father's "simple" estate rather quickly. They have waited over three years without resolution of the problems. The probate process has caused them to continually be reminded of his death. To remember is one thing, but to be forced into it is altogether unnecessary- particularly where proper planning by their father could have avoided all the difficulties. Another consideration for proper planning is the infighting of the heirs. Some heirs may feel that other beneficiaries took advantage of them, that the executor of the estate should not have taken fees, etc., etc. This can go on for decades. A trust can mitigate some of these problems. While it is not a guarantee of family bliss, at least one can at least try to keep unhealthy issues to a minimum.

Additionally, if no planning is done, the court system will probate the assets anyway and distribute them according to state statute. It's called dying intestate- without a will. Perhaps one third or half of the assets will go to the spouse and the rest to the children. The deceased may not have wanted that, but since there are no directions to the contrary, the state will determine the disposition. Dying without a will unquestionably costs additional time and expense. A will is the ABSOLUTE MINIMUM a client must do to protect assets and allow a distribution as desired.

Another very valuable reason for planning is continued management of assets. This may include not only various investments but, in particular, a family business. Time and time again, a life's work has been lost because there was no plan to continue the business after the death of the business owner. Creditors demand their money. Purchasers of the businesses products or services lose confidence in the ability of new or non-existent management to continue the manufacture and quality of products. The list of problems is endless, but the end result is essentially the same- purchasers go elsewhere and business orders decline. And when the business suffers, its value drops dramatically. Perhaps the only value is the inventory that is left- and this might have to be disposed of at a fire sale providing only 15 cents of the dollar. A proper business plan covering key men/women with adequate funding from insurance (many people despise insurance, but it does solve MANY problems at a low cost) can provide continuity of the business and a greatly enhanced value to the beneficiaries.

Some people still believe that there isn't much time to worry about estate issues since they are not going to live long enough to have much anyway. Life expectancy statistics in 1993 indicated the following: Life expectancy at birth has now been raised to 81.5 years. The death rate in 1992 was 8,603 per 1 million, which was down from 8,638 in 1990. Women are expected to outlive men by 9.9 years and whites will outlive blacks by about 11 years.

To summarize, proper planning can reduce costs, save time, save taxes, provide continuing management- literally all the things one tries to do while alive.

[Read above Article in it's entirety.]


Where does all this leave poor Mrs. Brady? And where does it leave you, THE ESTATE PLANNER, and your malpractice carrier? Like most other unpleasant things in life, it leaves you older and wiser and hopefully in a position to avoid this mess the next time a Mr. and Mrs. Brady saunter into your office.

By the way, by all reliable accounts, the stars who played the Brady children all grew up to be fine, upstanding citizens. Our hypothetical was just a way to focus attention on these issues and is not a reflection on those actors.


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C. Francis Baldwin
Updated Sunday, August 28, 2016