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Estate essentials
Prepare now to alleviate difficulties later


May 2014

"Picture this. Youíve been invited to a meeting; when you get there you realize itís the first meeting after your own death. You canít say anything. You can only observe. What do you see? Is your family celebrating your life or are they sitting there helpless not knowing what to do or whom to trust." This is how Karen Ellenbecker, president of the Ellenbecker Investment Group, illustrates the importance of estate planning to her clients.

"I have clients that are actually afraid that if they prepare an estate plan, then theyíll die ó like itís some kind of jinx. They donít want to face the fact that they will die no matter what they do. If they donít have a plan in place the government does, and it probably wonít be the same," she says.

An estate plan is a simple way to ensure the plans you make for your family and finances are met after you die, Ellenbecker says. Generally, an estate plan includes a will, an assignment of power of attorney, a living will or health-care proxy, also known as a medical power of attorney, and any trusts for the financial assets of minor children or disabled family members.

According to Evelyn L.  Brown, an attorney at DeWitt Ross & Stevens, the most common misconception about estate planning is that itís only for the rich. "A personís estate includes more than their bank and investment accounts. The question an individual should ask himself or herself is: Do I have property I own (including insurance policies on my life) that I wish to give to certain beneficiaries at my death? If the answer is yes, then that individual should have a plan in place for his or her estate."

Estate plans are also not as complicated and expensive as most people believe. Ellenbecker says it normally takes just two meetings, one to draft the documents and another to witness them. The whole process takes about 30 days. Taking care of the basics like drawing up a simple will and assigning financial and health-care powers of attorney can be prepared by a qualified attorney for around $1,200. Adding a trust can increase the cost to $2,000 to $3,000. As the situation becomes more complex, costs increase.

According to Garren Agle of Cream City Investments, most people donít need anything complex. "It should include a will, advance health-care directives and powers of attorney. Normally, part of the plan should deal with end of life health-care wishes. That way there is a document that hospital and doctors will accept. It takes the burden of making those decisions off of family members in very difficult times."

Unlike financial planning, estate planning can get very personal as family dynamics come into play. "I often say that estate planning is half math and half family counseling," says Mark Beck, director of wealth management services at Annex Wealth Management. A lot of people put it off because they donít want to face the decisions that have to be made. Who is left what, to whom do I entrust guardianship of my children, who has control over my health care if I am incapacitated, who has control of any trust funds. "A good estate plan involves a lot of hard conversations. For example, some of my clients have estranged children or donít trust their childís spouse. This is when they actually have to put that down on paper, and thatís never easy," Ellenbecker says.

Michelle Friedman, one of Brownís clients, set up a transfer on death deed for her grandmotherís home. This deed provides for an automatic title transfer upon death without having to involve the courts, and thus avoids costs and unnecessary delays and bureaucratic red tape. "Dealing with the death of a loved one is difficult enough ó having oneís affairs in order on the front end really can save a family emotional and financial stress," she says.  

Circumstances in life change, so it is important to review the plan periodically. Estate plans should be revisited every few years, or immediately following a major life event like a marriage or divorce, death or birth in the family, after receiving an inheritance or a move to a different state. No matter what the case, the experts agree, donít put it off. "You should start thinking about it at marriage, but definitely once child No. 1 is born. Itís time to have an estate plan," Agle says.



This story ran in the March 2014 issue of: