We all need a plan.  If you don’t have one, the State of Oklahoma has one for you and you may not like the State sponsored plan. What do you need?  It depends – classic lawyer answer, right?  It really does depend on your goals and objectives, your family, and your assets.

  • The basics.
    • At a minimum each of you should have a revocable living trust, pour-over will, durable power of attorney (financial decisions), healthcare power of attorney, and advanced directive (living will).  Depending on your goals and objectives, other planning such as a wealth preservation trust, life insurance trust, special needs trust, charitable trust and irrevocable trusts for your family may be relevant.
  • But I have a plan.
    • Congratulations, you are better off than 64% of the American public.  However, you need to realize that estate planning is not a one-time event where you get your binder full of documents, sit it on your bookshelf and forget about it.  You have to regularly review and update your plan for changes in your family, your assets and the law.
  • The number one problem we see with estate plans.
    • The client’s assets are not properly aligned with the plan.  This results in assets going around the plan and a client’s designated “helpers” getting to go through the probate process.  Avoid the “Morbid Scavenger Hunt”, get your assets properly aligned with your estate plan while you are alive and well.
  • So you have a business.
    •   If you have a business, you should have a buy-sell agreement if you have multiple owners unless you want to be in business with the other owner’s spouse or children.  If you are the sole owner consider including instructions for what happens to the business in the event of your disability or death in your trust.  You all will exit your business one day.  You need a plan for how this exit will occur.  Will you gift your business to children, sell it to key employees or possibly sell it to a third party?  It is never too early to start this planning.
  • A few points to consider:
    1. Your lawyer gets better with time – i.e. the “Practice of Law”.  Some things we now include in trusts:  remarriage protection, trust protector provisions, and divorce and creditor protection for your children.
    2. Is your Power of Attorney effective now or only upon your mental disability with the certification of a physician or two?
    3. Don’t put your children in business together if one of them is actively involved in the business and the other child or children are not.  There are ways to give the other children non-business assets or utilize life insurance as an equalizer.
    4. Consider the use of a corporate trustee if you or you and your spouse can’t serve as trustee.  It can become adversarial if one child serves a trustee – the other children feel like the process is taking too long, they envision the child trustee may be stealing from the trust, lawyers get involved – you get the picture.
    5. Ensure your personal property is assigned to the trust and use a personal property memorandum to list your “special stuff” and the person who gets each item.  You would not believe how many times families get ripped apart fighting over mom and dad’s special stuff (the baseball card collection, mom’s antiques, dad’s watch, the list goes on and on).
  • So what is this all going to cost?
    •   Costs vary based on your level of planning; a good estimate for a married couple is $2,000 to $3,000 for a will based plan with all of the ancillary documents (wills, durable power of attorney, healthcare power of attorney, advanced directive (living will) and $3,000 to $4,000 for a trust based plan with all of the ancillary documents (pour-over wills, durable power of attorney, healthcare power of attorney, advanced directive (living will).
  • How long does this take to set up?
    • In our office, the process starts with an initial meeting so we can understand your goals and objectives and determine if we want to work together, then we provide you with an engagement letter detailing the planning we will perform and the cost to design and implement the plan. If you want to move forward you will sign the engagement letter and then we have a meeting to ask specific questions to ensure we have all of the information we need to design and draft the estate plan.  Next, we draft the documents and schedule a time to review the documents with you.  When the documents match up with your goals and objectives, the documents are signed and then we work with you to ensure we have all of the assets properly aligned with the plan.  This process generally take two to three weeks to get the documents drafted and executed and another two to three weeks to get the assets properly aligned with the plan (if we have all the information we need to move forward).

If you would like a free consultation to discuss the design and implementation of a tax plan for you and your business please contact us today.