This article by the New York Times focuses most of its analysis on the impact of the estate tax repeal and the timing of this death.  In my educational seminars, I spend a few minutes telling folks tongue-in-cheek that Choosing The Wrong Year To Die is a “common estate planning mistake.”  My point, besides making a joke, is that the law is ever-changing.  The estate plan that is right on target today may be obsolete or rendered ineffective by changes in the law in the future.  That’s why it is so essential to engage a lawyer who has a consistent and deliberate formal updating process as an integral part of their practice.  Some estate planning attorney call these “client maintenance” or “client care” programs – whatever the name, make sure your attorney has one.  

However, timing is just one element of an effective estate plan.  The other part is finding a professional who understands the law and the rules who can work them to your benefit.  There’s a saying that there are two tax systems in this country.  No, not one for the rich and one for the poor – rather, it’s one for the informed, and another for the uninformed.  Without the proper planning, couples with an estate of $2MM could pay $550,000 in federal estate tax if they both passed away next year (2011).  With proper planning, the total federal estate tax due by that same couple drops to zero ($0).

As with income taxes, there are some people who (legally) pay much less than folks who make the same amount per year.  The difference is that the couple who paid less income tax engaged the services of a profession who understood the rules and how the system works, identifying opportunities and benefits that are not self-evident – and which would never occur to the lay person.

The value of a professional is not in the documents he creates. It’s in the knowledge and experience that enable him to tell you what you should do.

No matter what you year you may die.

Posted by Victor Medina, Medina Law Group, LLC

While it is a near certainty that some day you will die (notice how a good attorney never lets himself get painted into a corner), the truth is that you will more likely experience a long-term disability than a catastrophic death. If all you have is a will, you’ve done nothing to plan for that disability. A comprehensive approach will include planning for your disability as well as your passing.

In the end, estate planning should be about giving you the control and flexibility to live your life with peace of mind, knowing that there are safeguards in place that will help you provide for your loved ones if you are disabled. An effective estate plan will let you give what you want, to whom you want, when you want them to have it, and in the way you want them to have it. All the while providing a way to allow you to pass along your wisdom with you wealth.

Posted by Victor Medina
Medina, Martinez & Castroll, LLC

Despite what Suze Orman will tell you (and sell you), you should not get your estate plan out of a box. If the attorney (or financial professional) you’re interviewing is bragging about how easy it is create a will or a trust, you should run, not walk, in the other direction. The term “boilerplate” as it pertains to your entire document, should not be a source of comfort, but a source of concern.

The truth is that not all estate plans are, or should be, the same. While the word processing elements of an estate planning document is not altogether difficult (did you know that attorneys own computers?), a will or a trust is not something that should be created by the attorney without input from you.

A good estate planning attorney will want to spend time with you to figure out your hopes, your dreams and goals. Once you teach us the family, we will help you learn the law, and together we will create an estate plan that works.

Posted by Victor Medina
Medina, Martinez & Castroll, LLC

Contributing to this problem are two conclusions driven by changes in society. One, folks have discounted the value of counseling and advice from a professional. Out of a sense of ego or skepticism of people trying to “sell” them something, people have started replace the advice and counsel of a professional with knowledge gained by their own research, usually on the Internet.

Second, people now view professional services as the commodity of what is produced at the end of the service. If it has to do with life insurance, people focus on the price of the premium, without understanding the intricacies of the policies themselves and without understanding the quality of the underwriting. In the estate planning world, the focus is on the “it” of the documents — whatever “it” turns out to be for that client — a will, a trust, a living will, a power of attorney.

The unenlightened have already concluded from their own research what they need and they call around shopping that commodity on price.

While I take a long time to settle on a professional to help me in different areas (usually I trust my gut), once I chose that person, I rely on their expertise in helping me with my problems. The cost of the service is only relevant to whether the advice and service does what it’s supposed to do.

The truth is that to maximize the chance that your estate plan works when you need it to — you need an attorney who makes doing this work the focus of their practice. Your estate plan is no different than dealing with a medical condition — in most cases, you need a specialist who has seen your situation lots of other times and can apply their additional expertise and knowledge to help your specific problem. When it becomes appropriate, you begin to interview and select a cardiologist to treat you. Not only that, but you might go with the cardiologist who specializes in diabetes — adult onset diabetes.

Not all estate planning professionals are the same — you deserve the specialist.

Posted by Victor Medina
Medina, Martinez & Castroll, LLC

*By the way, if you’re one of the ones shopping on price, let me save you a phone call to my office. I’ll give you here the same response I give anyone who calls asking what the price for “it” (the will, the trust, etc.) is: It’s FREE. All of my wills are FREE. The trust is FREE and so is the living will. Never have and never will.

On the other hand, I charge for the counseling. Whether I’m worth my fee for that counseling is up to you to decide and I invite you make a free, no-obligation appointment to learn more. Reference this blog post and I will waive my normal $750 evaluation fee.*