Plan ahead

April 08, 2002|BY KEVIN CLAPP

To say an ounce of prevention is worth a pound of cure may be clich, but when it comes to an estate pre-planning is imperative.

Here then are some tips from attorney Scott Alan Morrison and certified public accountant Michael Flurie to help get the house in order.

1. Be a will-ing participant

Morrison says as many as 75 percent of people in the U.S. die without a will, which can lead to a gaggle of legal hurdles when divvying up an estate.


Not to mention that who you intended to have the fancy china or antique clock may not get them.

2. Make a list, check it twice

Flurie and Morrison agree the most difficult task is to get prospective clients to make a list of all of their assets.

"Take that family ring. People don't think of it as an asset," Flurie says. "Most people think of them as family heirlooms, some people think of them in dollars and cents. And some of them are surprised to find out how much it's worth."

Before meeting with a new client, Morrison asks them to list their assets. A good rule of thumb is to think of assets as anything that may be listed on homeowners insurance.

He also says clients easily forget to include other assets.

"I can guarantee you when people give us a list of assets they never list life insurance," Morrison says. "People don't really think about it."

3. In a will, be explicit.

If, for instance, someone preparing their will has a falling out with a relative and does not want to list them in the will, include language to that effect.

Morrison says a simple clause acknowledging that so-and-so is intentionally omitted can save time and prevent would-be heirs from contesting the will.

4. Taking the quick and painless route can occasionally be neither quick nor painless.

"A lot of times people do seat of the pants estate planning," Morrison says, where children's names, for instance, are listed on assets with the intent of smoothing the distribution process. "There are ways to do what you intended to do without just throwing their names on it."

A quick fix can create headaches in several scenarios.

There have been situations where a child whose name has been put on the deed to their home sold it while his parents were on vacation.

Other examples involve bank accounts where an adult child's name has been added. Say the child files for bankruptcy, or files for divorce. A portion of the bank account suddenly is included in their assets and can be used to pay off debts or be included in a divorce settlement.

The result is an unintended and easily avoidable loss of control of the estate.

5. Keep important documents close to home.

Morrison remembers one instance where he had power of attorney for someone who died. The power of attorney documentation was stored in a safe deposit box.

Proof of power of attorney was needed to gain access to the box; access to the box was necessary to prove power of attorney.

The moral of this story: To avoid legal back and forth, keep such documents at home, in a fireproof safe.

6. Practice revisionist history.

One's wishes a decade ago may not hold true with what they want done today. Laws change, relationships change and Morrison recommends reviewing a will or trust every three to five years.

"Anytime something changes you should have it reviewed," he says.

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