Thursday, Sep. 29 2011 6:16PM
Everyone needs an estate plan
By Scott Devouton, guest columnist
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ReprintI hear a lot of great “how to work with your lawyer” questions, many times from clients. This week, it was during a meeting with a team of insurance agents. “When should someone look at their estate plan?” We could have talked for hours.
While similar legal tools might be used in many estate plans, the people factor behind each plan is always different. If you consider complexities of frequent career moves, increased entrepreneurship, blended families, domestic partnerships, special needs and greater access to charitable giving, it’s easy to see how everyone’s estate plan is unique and will change throughout life. Each life turn could require you to put a plan in place or revise the one you already have.
Whether from a wealthy relative, the lottery or a career boon, if you find yourself with wealth, it’s crucial to have estate plan documents in order. This goes for anyone, at any age, regardless of whether kids are in the picture. Say you’re a young adult or unmarried without kids. At this point, unless you’re caring for a friend or relative, you’re pretty free and easy. If you don’t have much, it’s still good to have powers of attorney in place. If you have any assets at all, an estate plan is crucial to ensure those assets are managed according to your wishes.
Say you get married or remarried. Young, married couples should have the basics in place. If you marry, it’s a good time to call your lawyer or find one for the family. Remarriages are particularly important, as they may bring kids or estate plan documents from a prior marriage.
Say you get divorced. Estate planning is a good way to start your new life. It may involve revoking documents you adopted with your former spouse, and provides a good building block moving forward. If kids are in the picture, you could have important guardianship issues to address.
Say you’re a first-time parent. Kids change everything, right? Just as you schedule doctor appointments for your bundle of joy, you should talk to your lawyer about drawing up guardianship documents.
Say you have multiple kids who are still young. Having young children brings its own set of challenges, which can affect all aspects of life. When additional kids come along, you finally get that life insurance policy, or a child reveals the extent of special needs, it’s a good time to revisit estate plan documents. Say you become successful. Work promotions or business transactions may bring you an asset base that needs an appropriate estate plan. As your career progresses, especially at important milestones, have a coffee with your lawyer.
Say your kids go through adolescence. As kids move through high school and college, interests, abilities and proclivities start to solidify. How kids fit into your estate plan may change from the basic plan you adopted when they were babies. This is especially true for business owners, who may – or may not – see the business’s next generation take shape in their kids.
Say your kids become financially independent. While this bullet may make you chuckle, your estate plan may change as the kids leave your the nest of gold. Guardianship issues go away and needs change for you and your kids. You may also acquire new assets at this point, which need to be folded into your estate plan.
Say your kids have kids. Grandchildren literally bring a new level to your estate plan. They have their own needs and could play into tax planning strategies. As grandkids enter the picture, it’s a good time to have a coffee with your lawyer.
If you’re a business owner or have a long history with an employer, and as you see retirement in the distance, it’s also good to look at your estate plan. There could be strategies to implement now that have important effects down the road. This is especially true if your strategy is to reduce your asset base or transfer ownership of a business. Don’t wait until retirement for this.
When you finally retire, it’s also important to look at your estate plan. Your situation has likely changed since you last adopted estate plan documents. For some, it’s crucial to finally adopt an estate plan at all.
Based in Lee’s Summit, attorney Scott Devouton provides basic estate planning and small business services.
