My close relatives celebrated their 70th wedding anniversary a couple of years ago. Four months later, they passed away just days apart. After long and productive lives and declining health, their passing as they did was a blessing.
But it cost the family a lot of money. There were no estate taxes, inheritance taxes, capital gains taxes or income taxes arising from their deaths. However, they paid a good portion of their estate for long-term care when they could no longer care for themselves and had to move from their home to a care center. They did not receive the Medicaid assistance to which they were entitled, or VA benefits earned by service during WW II. And there were probate expenses. The greatest expense, though, was a rift in family unity.
I offered many times to help the couple plan to avoid all those expenses and to save money and grief for their children. I offered to do this for free. At least three times they took me up on my offer and thanked me for lending valuable assistance. Yet each time, they changed their minds before we got documents completed. Each time their reason was that friends and others who thought they knew a lot told them that they didn’t have enough assets to justify creating an estate plan. Well, they had enough assets to cost many, many thousands of dollars drained from their estate, and to trigger hard feelings among their children because of the financial issues that arose upon their deaths.
Our firm has focused on estate planning since 1993, when it became a charter member of the American Academy of Estate Planning Attorneys. MH currently has 12 attorneys, and we limit our practice exclusively to helping clients plan, protect and manage their estates. A great part of our service is helping families maintain unity and understanding in the difficult times of incapacity and death. In the process of our practice, we have talked to thousands of people about their affairs, and have helped create plans for over 30,000 clients.
We often hear from those we talk to that they don’t have enough assets to justify the expense of creating an estate plan. They have thought like, or listened to, such people as my relatives did. Well, you don’t have to have millions to benefit from a proper plan.
Obviously, the complexity of the plan depends upon the size and nature of your assets, but almost everyone will benefit from at least a basic plan.
A basic trust is usually very beneficial. Such a document would have saved my relatives, and their children, the expense and grief and friction that resulted from listening to poor advice. These are the circumstances under which at least a basic trust makes a lot of sense:
■ If you have minor children or other potential minor beneficiaries
■ If you have children from different relationships
■ If you have beneficiaries you want to protect
■ If you have any beneficiaries with special needs
■ If you have assets you want to protect
■ If you have an IRA, 401k, 403b or other retirement assets
■ If you have ownership in a business
■ If you have $100,000 or more in total assets, including your home, property, retirement accounts, life insurance, and bank and brokerage accounts.
Individual circumstances and needs vary, but if any of the above considerations applies to you, a trust offers significant protection. To find out more, schedule a free consultation with one of our qualified attorneys by calling 888.222.1328.
Contributed by MH Mesa, Scottsdale and Phoenix Estate Planning Attorney and Partner Theron M Hall, Jr.