Be Intentional

Your estate planning documents will address the disposition of your assets and will further name certain individuals to serve in particular roles. You can even provide specific parameters regarding the administration of your estate or any trust for beneficiaries. For example, you may have a trust that can be used for the “health, education and general welfare” of any of your children. You may wish to further direct that the payment of college education expenses will be limited to 4 years.

As you can imagine, there are innumerable possibilities when it comes to including specifics in your estate planning documents. Another option for sharing your wishes is to prepare a separate letter of intent for your guardian and/or Trustee. A letter of intent allows you to express your wishes in a unique and personal way. In addition, it is non-legal, so you do not need the assistance of an attorney when preparing a letter of intent. Furthermore, a letter of intent may be changed at any time without the necessity of changing your legal documents.

As the letter of intent is not a formal legal document, it is not technically enforceable should your guardian or trustee fail to follow its directions. However, it is a personal expression of your last wishes and unless your guardian or trustee has a heart of stone (and you would probably not have selected them if they did), then they will probably honor your wishes. If there is a particular issue that warrants a legal “guarantee,” then you could simply include that provision in your Will or Trust.

Finally, if you take the time to write a letter of intent, please take some steps to ensure it will be found in the event of your death or disability. You can keep any such letter with your important personal papers in your home or you may want to leave a copy with your attorney (as he or she will likely have original copies of your Wills, etc. anyway).

The letter of intent can be a powerful emotional tool to use as a part of your estate planning and I encourage all of my clients to use some form of this type of letter in their planning.

Happy Holidays

I want to wish everyone a very Merry Christmas and safe and happy holiday season. Take care!

Hang in There

As we approach the end of the year, it is worth noting that January 1, 2009 is a significant date for federal estate tax purposes. The "tax-free" amount, which is the amount an indvidual can pass estate tax free to his or her family, jumps from $2,000,000 to $3,500,000. The financial results for a family can be significant, as any assets over the tax-free amount are taxed at a roughly 45% rate. There may be some families that try to delay the enforcement of a living will until 2009. It is a shame that families may have to think about taxes in making those decisions, but unfortunately it is a result of the current tax law structure.

For the rest of us, such a significant tax law change may warrant a review of our current estate plan.