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Estate Planning is for Dummies

Estate Planning is for Dummies

I know.  For a moment there, you wondered how one could be so bold as to infringe on a copyright-protected title and so trite as to use the “For Dummies” moniker, but, to be fair, this blog is indeed for dummies.

The First Dummies:  Your Family Members

Say this often (and to yourself if you do not want leftovers hurled across the post-holiday dinner table): “My family generally has no idea what I own, what I owe, and what my last wishes are.”

In my estate planning/probate practice, I get two types of calls almost every day: (1) “We really need to sit down and discuss what exactly dad/mom/aunt/uncle has” and  (2) “Dad/mom/aunt/uncle passed away and we have no idea what they had.

Under scenario (1), congratulations.  Your familial paperwork is a mess, but you are doing what you can to prevent bereaved, not-in-their-right-mind family members (read: dummies) from having to figure out your estate in a time of shock.

Believe it when the Book of Matthew tells you that you will know not the day or hour and believe me when I tell you your relatives won’t be able to figure out your wishes. Not without your help.

Scribbles in a notebook you kept with your stamp collection will not help your family figure out that you had a huge Target credit card balance, or that you wanted the stamp collection to go to your cousin Ted in Mansfield because he was always interested in the philatelic arts.

Under scenario (2), you’ve made a lawyer’s day.  The process of sorting out an estate with no will or other guidance takes hours of work…and hours equal dollars in the legal profession.  By giving a little thought to your estate plans while you are still alive, you reduce the amount of work (and cost) your family members will have to put in to honor your final wishes.

In the worlds of estate planning and extreme water sports, an ounce of prevention is worth ten pounds of cure.

Under both scenarios, while family members think they have the right idea about what you wanted as to your remains (Bury them in your childhood hometown? Cremate them and scatter your ashes in the Pacific Ocean, which you loved so well?), the simple fact is, they just don’t know.  Let’s get this one right.

The Second Dummy: Uncle Sam

While you may mumble to yourself, “I’ve known this for years,” understand that Uncle Sam will take whenever, and whatever, assets he can.  While Ohio is in a current estate tax “lull,” the federal government, like our neighbors in Pennsylvania, has not taken such a vacation.

Uncle Sam knows what you have, and what you had, primarily due to self reporting by the estate in question.  That’s right:  the government is ignorant of your assets until it tries an audit or your bereaved file your estate.

The government can’t 1099 a dead man’s stamp collection, or his ‘69 Camaro in the garage. However, by failing to estate plan, you make these assets part of what will be fully reported to the feds/state/commonwealth as part of your estate.  “But, Counselor,” you say, “I live in Ohio and don’t have enough assets for the government to get involved.”

And to that I say you’re right …

But–and there’s always a “but” in this line of work–that might not always be the case.  Your plan certainly needs to account for the current graciousness of the Ohio legislature, but you can’t bank on an estate tax-free environment forever, especially if you own property or live in Pennsylvania.

Be smart about taxes and what Uncle Sam has in mind as to his “fair” share of your estate.   After all, Ted really wants that stamp collection, and having to liquidate it to settle your tax bill would be a shame.

The Third Dummy:  You

You aren’t going to live forever, you aren’t as young as you think you are (looking at you, Gen X-er), you shouldn’t text and drive, eat red meat, or take that last shot and drive home.

But you’re human, more hapless wanderer than tactician, and the most you’ve done to plan for the eventual hereafter is tell your friends to make sure they play “Comfortably Numb” at your wake.

Most attorneys (at least those with hearts) do consultations for free.  Sit down with one and talk about your situation.  I’ve told many young soldiers heading to Iraq or Afghanistan that a will or trust wasn’t for them because they have limited assets or could readily use transfer on death affidavits.  A lawyer with a heart won’t try to sell you the “gold package” estate plan when your life situation calls for the opposite.

At the end of the day, do something. 

Make it less of a headache for those “dummies” who would rather be mourning than dealing with your legal obligations, and make a solid estate plan with a licensed attorney before it’s too late.

Besides, it would be impolite to keep Ted from putting your stamps on eBay.

________

Vito J. Abruzzino is a lawyer with Harrington, Hoppe & Mitchell, Ltd. He can be reached at vabruzzino@hhmlaw.com or at (330) 377-6586.