Sunday, September 12, 2010

Comprehensive Estate Planning

 Written By: Attorney Jeffrey A. Marshall , CELA*
Many people think estate planning is about dying.  But comprehensive estate planning is more about life - your life and the lives of the people you love. It is about protecting you and your family by preparing for the future while there is time to plan. 

Comprehensive estate planning allows you to:
∙           ensure that your values will be respected and your intentions followed in the event of your illness;
∙           permit your trusted family members to manage finances and have access to needed health information if you are incapacitated;
∙           protect your family from the cost of your health care and long-term care expenses;
∙           reduce state and federal death taxes
∙           provide for family members with special needs such as a disability;
∙           avoid family disputes;
∙           protect and provide for your family after you are gone.                                 

Creating a Comprehensive Estate Plan
Comprehensive planning starts by planning for the remainder of your life. You need to create a life plan that will protect your lifestyle and financial security and help you attain your goals during the rest of your lifetime.

Especially important is planning for the possibility of your incapacity.  Who should be authorized to step in and manage your finances if needed?  Who should have access to uour personal medical information?  What financial and medical decisions should they be authorized to make?   

What if you need long-term care?  What can you do to make sure you are able to stay at home rather than in a nursing facility?  What if you do need nursing home care?  The costs are staggering - now over $80,000 a year, with an average stay of 2 ½ years. This can quickly destroy your family's financial security. With advance planning you can protect your family’s financial security from this risk. 

If you are married, a comprehensive estate plan will help ensure that your spouse will be able to live his or her remaining years with dignity and financial security. At your death, it can preserve an inheritance to pass along to your family in a manner that will not be squandered because of inexperience, illness, or a marriage gone bad.  

Depending on the value of the things you own, your estate plan may include gifts you make during lifetime to take advantage of planning tools like the annual gift tax exclusion and discounts.

A comprehensive estate plan will allow you to best utilize your assets for your benefit during your life and ultimately protect and preserve them for the benefit of your intended beneficiaries. It should be developed with the expert help of an estate planning lawyer and your financial and accounting professionals.

Implementing Your Plan
Once you have devised your plan, it needs to be implemented.  Implementation usually involves a number of legal, financial, and health care documents, such as the following:

 ∙           Power of Attorney
For most people there is no legal document that has the potential to become as important in their lives as a power of attorney.  In the event of your incapacity, a power of attorney can help ensure that the desired decisions will be made for you by the people you choose. A well-drafted power of attorney will increase the likelihood that your values will always be respected and that your family can be protected from your health care costs. 

A power of attorney can be the key that opens the door to effective asset protection planning and the preservation of your family's financial security. The document, however, must be carefully crafted in order to authorize this type of planning. The absence of appropriate authorizations in a power of attorney can seriously jeopardize your family's financial security. And a poorly drafted power of attorney can be a license to steal.

The health care power of attorney and the living will are documents that give you some measure of control over the medical treatment you will receive if you ever become incompetent.  The health care power of attorney is more flexible because it is not limited to just terminal illness situations.  Recent federal rules may be used by health care providers to deny your family access to your health information and participation in your care.  You need to authorize the right family members to have access to your information and provide them with the authority to serve as advocates and decision makers for you.  

 ∙           Asset Protection Documents
In addition to an asset protection power of attorney, specialized deeds, trusts, and other agreements may help protect your assets in the event that you (or your spouse) should ever require long-term care either at home or in a nursing facility.   

 ∙           Will 
In this document, you can give important instructions regarding how your property should be distributed after your death, who will care for your children and other loved ones, and much more. Your will helps assure that your assets will be distributed to the persons you want in the right amounts and at the right times. Your will can help reduce or eliminate the taxes that will be levied against your estate, avoid family conflicts, and provide for religious, educational, or other charitable causes. If you have young children, your will is the legal document you use to name a guardian for them.  

∙           Ownership & Beneficiary Designations
At your death, the transfer of some of your property will likely occur without regard to the provisions of your will. Joint accounts, life insurance, annuities, IRAs and other retirement plans, and other assets for which beneficiaries have been named are all distributed without regard to what your will says. You need to create a plan that covers all of your assets.  Comprehensive estate planning requires a coordinated review and update of all of your ownership and beneficiary arrangements.

 ∙           Trusts
Trusts are particularly useful if you have a family member with a disability.  Specialized trusts can be used to hold funds to enhance the beneficiary's life without jeopardizing his or her eligibility for government benefits.  Individuals and married couples can set up trusts that will protect their assets from the cost of care in the event of a future disability. In addition, trusts can often be used to minimize taxes.

The benefits of comprehensive estate planning are compelling.  Once your plan has been implemented, you will enjoy the peace of mind of knowing that you have done all you can to protect yourself and your family from whatever the future may hold.  It is never too early to get started. Just make certain that your estate planning is comprehensive.  

*Attorney Marshall is licensed to practice law in the Commonwealth of Pennsylvania and is a Certified as an Elder Law Attorney (CELA) by the National Elder Law Foundation. You can follow him on Twitter at, or through his website,

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