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Guarding Your Wealth for Seniors
Don’t Be Left Holding the Bag on Estate Planning
By Jeffrey D. Voudrie, CFP
Dec. 28, 2005 - Ned almost lost the farm that had
been in his family for 8 generations! We’ve all heard that ‘The Devil is
in the details.’ It is especially true when it comes to estate planning.
Make sure you don’t make the same mistake Ned did.
Ned and Nellie Mae were in their early 80’s. Even
though they had been happily married for over 30 years, they each had
children from a previous marriage. About 10 years ago they became
concerned about the amount of estate taxes that would be due on the
family farm when they died. They’d heard the nightmare stories about
losing the farm to Uncle Sam and they wanted to make sure it wouldn’t
happen to them!
So Ned went to see his local attorney. He told the
attorney about their estate tax concerns and also that he wanted to make
sure the farm went to his children—stayed in his family—instead of going
to his stepchildren when he died. Well, the attorney told Ned what to do
and, obediently, Ned and Nellie Mae implemented that plan over the next
9 years.
That’s when I got involved. The attorney’s advice
sounded good, but the Devil is in the details! And the attorney missed a
few details that left Ned holding the bag.
The result was that if Ned had passed away, his
share of the farm could have gone to his stepchildren instead of his
daughters—the very thing he was trying to prevent!
The attorney’s plan was also supposed to reduce the
amount of estate taxes that would have to be paid, but because the
attorney missed one small detail it would be as if the plan had never
happened, leaving a $750,000 tax bill! They followed a plan for 9 years
and were right back where they started!
Fortunately, I was able to help Ned and Nellie Mae
get the chaos that had become their estate plan quickly and easily
sorted out. With the help of a competent attorney, Ned and Nellie Mae
now have the peace of mind that what they want to happen, will happen.
Their estate taxes have been drastically reduced,
possibly even eliminated. Just as important, Nellie Mae’s children will
get her portion of the estate and Ned’s children his. The farm that has
been in his family for 8 generations will stay that way for a few
generations more.
To their credit, Ned and Nellie Mae did everything
they were supposed to. They were proactive in recognizing that they
needed to take action to reduce their estate taxes. They knew they
needed legal documents in place to dispose of their estate according to
their wishes, minimizing any conflict between the children.
They sought out an attorney to help them. They
followed the attorney’s advice and did what they were supposed to. So
what went wrong and how can you avoid making the same mistake?
The only mistake Ned and Nellie Mae made was not
working with an attorney that specialized in handling complex estates.
Their attorney was a generalist. Being in a small town he did a little
bit of everything, legally speaking.
Just like in medicine, it is hard for any attorney
to be an expert in all areas of the law. You may have a family doctor,
but if you need a heart transplant they will refer you to a cardiac
specialist. If you have severe foot problems they will refer you to a
podiatrist. If you have hemorrhoids…well, never mind, you get the
picture!
Ned and Nellie Mae’s attorney knew in general what
they should do, but since he wasn’t an expert in the area of estate
planning he missed a crucial detail.
It’s the same way when it comes to handling all of
your financial affairs. For all but the simplest cases, you should be
working with someone who specializes in the areas you need help. For
instance, I specialize in Estate Planning, Insurance and Investments for
affluent seniors, retirees and near-retirees. Others specialize in
company retirement programs, etc. Work with a competent professional
that specializes in your situation.
Don’t be left holding the bag! Go to
www.guardingyourwealth.com. While there, be sure to tell us your
story. Maybe others can keep from making the same mistakes.
If you have a specific question or would like more
information give me a call toll-free at 1-877-827-1463 or go to
www.guardingyourwealth.com. You can also reach me by email at
jeff@guardingyourwealth.com.
About Guarding Your Wealth:
“Guarding Your Wealth” is a
nationally syndicated weekly personal finance column written by Jeffrey
D. Voudrie, CFP. Mr. Voudrie is the President of Legacy Planning Group,
a private wealth management firm that employs sophisticated proprietary
strategies designed to protect and grow its clients' investments. Please
visit his website,
www.guardingyourwealth.com to read past articles under the Guarding
Your Wealth Article Archive.
Guarding Your Wealth for Seniors are
a collection of columns by Voudrie that deal with issues of particular
interest to senior citizens. Click here
for all columns.
In addition to being a nationally
syndicated columnist and Certified Financial Planning Practitioner, Mr.
Voudrie provides personal, private money management services to clients
nationwide.
Looking for an energetic expert who
is passionate about financial and wealth management? Mr. Voudrie is an
excellent speaker who will excite and inspire your audience. Mr. Voudrie
is available for a limited number of speaking engagements, television
appearances and radio talk shows. For booking information, email e-mail
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