Answer Your Clients’ Nontax Estate Planning Questions

Those who work as financial professionals deal with clients’ estate planning issues every day. When advising clients, some tend to focus heavily on tax issues—including income, estate and generation-skipping taxes. While tax planning is a big part of estate planning, taxes aren’t necessarily the first question on a client’s mind when beginning the process. This is especially true for those who are starting an estate plan for the first time. Ultimately, the answers to these nontax estate planning questions may have a significant impact on the plan.

Why do I need to prepare a will or trust at all?

At death, the law provides a procedure by which personally owned assets are transferred from the deceased person to someone else. A person may give direction about the designated property with a:

• Will.
• Beneficiary designation.
• Transfer-on-death (or pay-on-death) designation.
• Specific titling.
• Contract.
• Living trust.

Even with so many transfer options available, a will or trust is still necessary for most clients. A person who dies without a will is said to be intestate. Those who die intestate have an estate plan imposed on them by the state in which they lived at the time of their death. Any personally owned asset subject to probate will be governed by the rules of intestate succession.

What is probate, and why should I avoid it?

Probate is the court supervision of the transfer of assets. On its face that seems OK. Where family me