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Wednesday, April 25, 2012

"Estate Planning" Isn't Just for Rich People
By Andrew Garcia

I was at a favorite 'watering hole' last week enjoying a night out with my best friend and life partner, Nancy, and we started a conversation with some great people sitting next to us. The topic of what we all did for a living came up. When I said that I was an "estate planning" attorney and that I prepared wills and trusts for people, they asked "isn't estate planning just for rich people?" My simple answer was "no" and then I went on to explain why.

In the context of “estate planning,” an “estate” is simply all of the property or assets that a person owns. Examples would include your home, a second home or vacation property, time shares, a small business, bank accounts, mutual fund or investment accounts, IRAs, life insurance policies, jewelry, your car – yes, even the clothes on your back.

If you own it or have an interest in it, then it’s part of your estate.

So, with this in mind, an “estate plan” is a strategy that can be legally enforced to protect, preserve and manage all of your assets if you die or become disabled. It can ensure that your property gets passed on to the people you love. It can name people to make crucial medical decisions for you when you’re not able to. It can help reduce the amount of inheritance taxes that have to be paid. It can name people to act as guardians of your minor children if something were to happen to you.

To use a sports analogy, it’s a “game plan” for life. A football coach wouldn’t take the field on game day without some sort of game plan; if he did, his team would probably just have to “wing it” and the results wouldn’t be good. Why then if you have a family to protect would you want to “wing it” and not have a game plan in the form of an estate plan for life?

Most people, whether they’re 25 or 75, have worked hard to build their assets and are usually interested in providing some kind of financial security for their spouse, their children or their grandchildren. Doesn’t it make sense then to devise a “game plan” to protect them in the event that something happens?

Let’s face it, as morbid as it sounds, things happen to people every day. It’s the human condition. We suffer unexpected strokes, massive coronaries, car accidents and even random criminal violence that can take us away in a heartbeat. If a coach wouldn’t just let his team “wing it” on game day, why would you let your family “wing it” after something catastrophic happens to you?

And that’s the reason behind estate planning. It’s your “game plan” to protect, preserve and manage your assets when you die or become disabled. So the answer to the questions I posed at the beginning of this chapter is “No. Estate planning isn’t just for the rich and wealthy. It’s for everybody who cares about having a game plan for when they’re gone.”

8:07 pm hst 

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