1. The Planning Phase
During this first phase, you and your attorney will meet to collect information about your assets, how they are owned, what the value of those assets are, how much they originally cost and if they produce any income.
Assets can include bank accounts, stock portfolios, business interests, life insurance policies, real estate holdings, including your home and any vacation properties, retirements accounts and if applicable, any high-value personal property such as antiques, jewels and artifacts. The attorney will want to know how your assets are titled (for example, in your own name, or joint with someone) and who you have named as a beneficiary (for life insurance, retirement accounts, and annuities). The collection of these assets is called your "estate". In short, if you have a financial interest in something, we want to know about it.
Your attorney will ask you what your goals are, i.e., what you wish to accomplish with your estate plan. Frequent responses are probate avoidance, save estate taxes, protect assets from nursing home costs. Special circumstances in your family situation should be discussed, such as providing for a disabled child or wishing to leave more to one child than another.
We will want to know about the persons for whom you want to provide. These people are called your "beneficiaries". How old are these people? Are they capable of handling complicated financial transactions? Are they good with money? Are they financially responsible? What is the likelihood that they will be sued or get divorced? These are all important considerations in determining how best to provide for the ones you love when you can no longer do it yourself.
The attorney will also talk with you about your family and whom you depend on the most. She will want to know your choice of agent to make financial decisions for you if you are unable to do so. She will want to know whom it is that you want to make healthcare decisions for you if you are unable to communicate such decisions or lack the capacity to make such decisions. She will also want to know about your general health, the likelihood that you could become incapacitated in the near future, and the impact your incapacity could have on your life and on your family members.
You must select someone to settle your estate at your death. This person will need to handle the financial affairs of sorting through your assets, paying your final debts, preparing your final tax returns, and distributing whatever assets are left to the intended recipients. This person is called an Executor or Personal Representative. In picking the right person to be Executor, you should keep in mind that this person will need to keep records of what is collected and paid out and ideally is someone that the remaining members of the family will respect. This person need not be experienced at probating estates, since this person will often hire an attorney to assist them with the proper court filings and to instruct them on how to perform the job being asked of them. However, it is helpful if this person knows something about your assets. In many cases, it may take more than one person to fulfill all of the duties. For example, your surviving spouse may know a lot about your assets and have the respect of your children, but may need the assistance of another family member to help with the record keeping and bill-paying functions.
If you and your lawyer decide a Living Trust is right for you, then you will need to select a Trustee. The financial duties of a Trustee are similar to the duties of the Executor. The Trustee is required to manage the assets of the Trust, to pay all of the debts of the Trust and to make distributions to beneficiaries pursuant to the terms of the trust.
If you have minor children or dependents for whom you are legally responsible, you will need to decide who should care for these persons in the event that you are unable to care for them yourself. This person is called a guardian. The right guardian need not be good with money; what is important is that s/he is a good fit for your minor children or dependents. For example, your brother is a "kid at heart" and loves your children and they love him, but he's a financial disaster. He might still be an excellent choice to be a guardian, just make sure you have someone else to handle the finances.
These are tough decisions and are the ones that usually keep clients from moving forward with their estate plans. Your attorney will assist you in making the right choice. Furthermore, these decisions are not "fixed in stone". As long as you are competent, you can change your mind and your estate plan. For example, if a week after you have decided to name your brother as guardian for your minor children you find out he is getting divorced, you can change your mind and pick someone else. If later on you reconsider, you can appoint him again. The same is true for who you pick to make decisions for you while you are incapacitated and who you pick to be the executor of your will. So make the best decision you can with the information you have right now and be ready to change your mind, and your estate plan, if necessary. If the only change you make to your estate plan is the name of your guardian and or the name of your executor, this can be done very easily and inexpensively.
If you have previously done an estate plan with another attorney and currently have signed estate planning documents, the attorney will want to review copies of these documents to determine how well they fit into your current situation or whether revisions are necessary.
Once we have a good idea of what your life is like and what is important to you, the attorney will make a variety of recommendations. As with many things in life, there will often be trade-offs. In making recommendations, we will point out these trade-offs and together you and the attorney will come up with a unique plan that meets your specific goals. Thus, the planning phase is really a joint effort between you and the attorney.
Sometimes the Planning Phase can be completed in a single meeting. Sometimes it takes several meetings, and/or a combination of meetings, follow-up emails and/or telephone conferences to complete this important phase. We stand ready to do "whatever it takes" to make you feel comfortable with your estate planning decisions.
Next... 2. The Document Phase