"But I've Got a Good Lawyer"

How important is it to have a Will when you die? And to have a good lawyer who keeps your Will up-to-date?

Next time you are tempted to say, “Everything is in good shape. I have a good lawyer”, better think twice.

I was in the life insurance business for almost 20 years; first in Chicago and last in Denver. I’ve been out of the business since 1984, and in 1986 I cleared the deck and trashed all my memorabilia and certificates. I can still hear the glass breaking in the frame that held my C.L.U. certificate, when I threw it in a dumpster when I was moving from Kansas City back to Colorado. That was so free-ing!!! But I digress…

I met a wonderful couple in Illinois in the mid-1990s. In view of overall circumstances I offered to look over their estate planning to see any attention might be needed by their legal, accounting or financial advisors. “No, thanks. Everything is in order. We have a good lawyer.”

Sometime later the man died, and I offered again to his widow. “No, thanks. Everything is in order. I have a good lawyer.”

Sometime after that, she died. And do you know what? They did have a good lawyer. He had set up a trust for them and named a bank as Trustee.

The only problem was that 15 years earlier, the bank had closed its Trust Department. Now, how does something like that happen and a Will doesn’t get updated?

What happens when a Trustee is not available to serve or doesn’t exist when the time arises? It’s off to court, and we all know what that costs. Lots and lots of money. Lots of unnecessary money.

Today I don’t recall whether a successor trustee was named in the Will, because it took quite a while to get another bank named as Trustee. Closing the estate and winding up the trust took several years. I always thought it should have taken months, not years. The heirs paid huge administration costs that could have been avoided by careful, current planning.

All those costs were money that could have been kept in the family. When you think about reviewing your estate planning, keep this thought in mind. If you were going to have heart surgery, would you go to your family doctor? If you needed brain surgery, would you go to a foot doctor? No, of course not. You’d go to a specialist.

The circumstances of many families do not call for elaborate estate planning. You don’t buy a Ferrari, if the speed limit in your area is 55MPH. Sometimes a “simple” Will will suffice. And sometimes it won’t.

How do you find good advisors? You set about making a plan of action, with the first step being to build a team. Go out and shop for your lawyer, accountant, insurance agent, real estate agent. See if they pass the “Smell Test.” If the words they use are too “big”, keep shopping. If you understand everything they say the first time, you might just have found the right one.

Listen to what they have to say, and ask them what it’s going to cost. Then go home and sleep on it. Then make your choice. And then keep an eye on the choice you have made. Set goals and measure your progress toward them.

A wise, young lawyer in Colorado defined Estate Planning back in the 1970s as, “Getting what you have to those you want to get it, at the time when you want them to get it, and in the form in which you want them to get it. And then, if you can save some taxes, you do that, too.”

Estate planning for many no longer includes elaborate estate tax-based planning, thanks to increases in the threshold before an estate pays a Federal Estate Tax. But don’t forget the Illinois Inheritance Tax. Explore ways to minimize or avoid the Inheritance Tax. Avoiding it is not illegal; evading it is.