Justin, I want to get my affairs in order, but I’m not sure where to start. I did a will many years ago, but it’s outdated now. I considered deeding my home to my children to keep it out of probate, but my accountant advised against it. It seems like there is a lot to think about, but I don’t know all the right questions to ask much less all the answers. Can you point me in the right direction? – James
James, the fact that you are motivated to get your affairs in order is a step in the right direction. The particular issues you noted in your question also show that you’re on the right track, so don’t get discouraged.
Having a last will and testament, even one that’s outdated, is better than not having a will. But you should know that having a will—even a new one—won’t keep your estate out of probate court, so your planning must go beyond updating your will to actually get your affairs in order and avoid probate. But your accountant was right; deeding your property directly to your kids instead of allowing them to inherit that property through your estate plan can cause negative tax treatment. We often recommend use of a trust to avoid both probate court and negative tax consequences.
Your question is a great example of the fact that there are multiple, sometimes competing, considerations involved in preparing your estate plan. In fact, the subtitle to Justin’s book, You Need A Plan, is “How to Prepare for Death, Taxes, and Long-Term Care.” It’s broken into three main sections to emphasize the three broad areas of planning that most should consider when creating and thorough and effective estate plan. Order your free copy at YourPlanMatters.com.
Having the book is a big help, but don’t forget, you can also call our office for a no-charge strategy session. There’s no substitute for spending time with an experienced attorney when working to balance multiple goals in one plan. You don’t have to figure it out on your own.