SR Client Question: What should I consider when I begin estate planning?

estate planningInitiating the estate planning process is a big step, one too many people avoid for too long.  Regardless of your assets or life stage, everyone should undergo an end-of-life planning exercise, primarily through creation of an estate or trust. Customizing your estate plan to account for inheritance and distribution of assets doesn’t have to be difficult when done alongside an estate planning professional.  ShindelRock’s Maria Montie, a longtime estate and trust planner, highlights three important questions she always asks her estate planning clients:

1. Who?
The first instinct of most clients when beginning the estate and trust planning process is to treat all heirs equally.  They want conditions for receipt to be the same for all their children and the size or nature of the inheritance to be the same across the board.  However, circumstances may necessitate a departure from 100% fairness to all heirs.  Perhaps one has a illness that requires extra financial help, or keeps him or her from earning the same over a lifetime as her stockbroker brother.  Should the children be treated exactly the same given these discrepancies?  Perhaps, but perhaps not, and having the difficult conversation with my clients during the planning process can ensure the heirs are truly treated fairly, all things considered.

2. When?
A critical issue for an estate planner is the age the heirs will be when they receive their inheritance.  Try to imagine your first grader with access to $1 million in her teen years, or a grandson with a drug problem suddenly coming into a fortune without oversight.  The results are rarely as the giver intended, and almost routinely negative for the recipient in the long-term.  Delaying control of an inheritance so that the recipient is of sufficient emotional maturity to handle the money by the use of a customized trust can be a relatively objective way to address this concern.

4. How much?
Perhaps you have heard of the Giving Pledge, a commitment by the world’s wealthiest individuals and families to dedicate the majority of their wealth to philanthropy.  Many truly wealthy people hesitate to leave their heirs “too much,” wishing them to be rich by most anyone’s standards but still left with a life purpose through judicious allocation of a vast fortune.  Although billionaires no doubt encounter this conundrum, many estate planners of more “average” wealth may decide to leave some portion of their assets to a charity or other institution.  Divvying up the assets according to the client’s wishes is a key function of a well-planned estate and trust.

Montie concludes by reminding clients that it’s never too late or too early to start the estate and trust planning process.  The professionals at ShindelRock can initiate the process and work with your trusted legal adviser or recommend our own.  Ask about creating or updating your estate plan today.