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Estate Planning Questionnaire: 5 Things to Think About Before Meeting with Your Estate Attorney

Estate documents should be reviewed regularly to ensure that they are up-to-date and still adequately express your wishes pertaining to the distribution of your estate. Changes in your personal, family, or business circumstances along with changes in tax laws can necessitate the need for updates. At a minimum, beneficiary designations on retirement accounts and life insurance policies should be reviewed, as well as titling of accounts.

However, before meeting with an attorney to update your current estate plan, you should consider more strategic questions with regards to how you would ultimately like to design an inheritance. The following estate planning questionnaire is a list of five questions to help with that process.

  1. How Much is Too Much?

Consider what you consider to be an appropriate amount of assets to leave your children. For some people, they want to pass on as much as possible to subsequent generations, while others have a limit on the amount they want to pass on.

Warren Buffett famously said, “The goal is to leave children enough money so that they would feel they could do anything, but not so much that they could do nothing.” 

Do you agree with Buffett that there is a point at which an inheritance can become detrimental to a child’s ambition and productivity? If so, what is that amount?

  1. How Old Should Heirs Be?

A critical issue to consider in determining how best to utilize trusts (if at all) is the age your heirs will be when they receive their inheritance. We can help you understand the size of the inheritance that your children may be receiving at certain ages, as well as the potential ramifications of unlimited access to that amount.

Examples abound of the detrimental effects of young people having too much money at too young an age. Delaying control of an inheritance by the use of a trust can be a relatively straightforward way to address this issue. On the other hand, if you do not have these concerns, it could make sense to simplify your estate plan to avoid overcomplicated provisions that delay the outright receipt of inheritance for beneficiaries.

  1. Are There Any ‘Issues’?

Although it may be difficult to come to terms with a child’s drug or alcohol addiction or mental illness, it is extremely important to take these issues into account in the estate plan.

Unrestricted access in these circumstances can fuel an existing problem or cause ineligibility for an important government assistance program.  Therefore, it is also important to evaluate whether there are any concerns about a child’s ability to handle finances.

  1. Should All Children be Treated the Same?

Parents often want to treat their children exactly the same in an estate plan. If one child is to receive assets outright or at a certain age, then they believe all children should receive those under the same terms.

But often there are special circumstances that may call for a departure from total equality. What if one child has required more financial assistance throughout his/her life than another? Should the inheritances be different in that case in order to equalize the total amount of support provided? What if one child has married a successful executive and another is a social worker?

Perhaps one child’s inheritance should be smaller than the others, or held in trust, while another child’s is given outright. Whatever you decide, it is crucial to consider how it will be viewed by your children to ensure (as much as possible) that they do not view any discrepancy as a sign of unequal love for each of them. A customized estate plan can take all of this into account.

  1. Who is the Best Person for the Job?

Wills and trusts usually have fiduciaries, known as executors (or personal representatives) and trustees, who are in charge. Before naming the oldest child to perform these jobs or a family friend or relative, understand what will be required of the role and whether he or she has the requisite skills.

Of course, the best course of action is to name the best person for the job, rather than naming someone out of concern that he or she may be offended if someone else is given the job. Corporate trustees and executors can make sense in certain circumstances as well.

You should be cautious of leaving one family in charge of another family member’s money. Once parents are deceased, long-held resentments can resurface and make the arrangement challenging for all parties. Naming the wrong person for the job can, at a minimum, increase costs down the road; at worst, it could result in an estate or trust being administered incorrectly, or perhaps even in litigation.

Designing the optimal estate plan requires that you consider a multitude of factors. By evaluating this estate planning questionnaire, you will have a better chance of implementing a plan that fits your particular facts and circumstances.

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