End of Year Checklist to Protect Your Family

One of the greatest gifts you can give to your family is a well-crafted and well-thought out estate plan.  Checkups make good sense when you have moved from one state to another, your financial circumstances have changed, your family circumstances have changed or you have not had your plan, beneficiary designations on retirement plans and life insurance, and asset titling reviewed within the past three years.  The law has changed and without a checkup there may be unanticipated problems that could easily be avoided.

Steps taken now can and WILL AVOID problems later.  The problems a well crafted plan CAN AVOID are:

       (1)  unnecessary probate,

       (2)  unnecessary excise taxes,

       (3)  unnecessary acceleration of income taxes,

       (4)  loss to in laws in divorce,

       (5)  loss to creditors in a law suit.

Controlling the ultimate devolution of family property is your responsibility.

If this is all considered and done well through generations, the results can be truly amazing when compared to a family that fails to plan.  An example best illustrates. 

EXAMPLE: Let us assume, Mom and Dad have two children, Jane and Jack.  Jane is a surgeon and is married to Dick.  They have three children: Amy, Sue and Lee.  Jack is a wildly successful advertising executive.  He is married to Reese.  They have two children: Sam and Dee.  If Mom and Dad do some basic planning, they can easily leave their assets to Jane and Jack in two equal shares in two separate trusts.  Jane and Jack can each be the trustee of their own trust and they can each be the initial beneficiary, too.  In effect, they can each have total control and full beneficial enjoyment during their life.  They can have their cake and eat it too.  Really!  They can.

If the trusts for Jane and Jack are properly drafted under South Carolina law, Jane and Jack can sleep well in knowing that if they are sued in a divorce or lawsuit (like a medical malpractice claim because Jane left a sponge in a patient during surgery), those funds are protected and also that if they pass on, the assets will not unnecessarily be subject to the federal estate tax in their estate.  Mom and Dad can sleep well in knowing that they have also ensured that their descendants (Amy, Sue, Lee, Sam and Dee) will reap the maximum benefit from their assets.

Keeping money in the family is a worthy goal.  Taking action now can assure the goal will be achieved.  Protecting your family is NOT DIFFICULT if planned for in advance. 


Contributed by:

Mark F. Winn

Attorney at Law, PLLC