Five Key Considerations for your Estate Plan

When most people think about estate planning, they focus on their Will - but there’s far more to estate planning than that.  Here are five of the most important aspects of estate planning that many people frequently overlook.  When you get to #5, you’ll see why consulting with an attorney who does both Estate Planning and Elder Law could be extremely beneficial to you – and your heirs.

#1:  It’s Not All About the Will:  Beneficiary Designations and Joint Ownership

For many people, it is likely that some assets will pass outside their Wills.  That’s because some accounts have beneficiary designations that enable the assets in those accounts to pass directly to the beneficiaries upon your death.  For example, your 401(k) will require you to name a beneficiary, and your IRA will suggest that you do so.  Named beneficiaries, often your spouse or your children, will inherit the account directly, without going through probate (see #4 below for a discussion of the probate process).

Bank accounts and investment accounts may also have beneficiary designations.  Common beneficiary designations are “ITF” (in trust for), “POD” (pay on death to), or “TOD” (transfer on death to).   An account with a beneficiary designation is not subject to your Will, and as with retirement accounts, passes outside of the probate process.

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Similarly, jointly owned accounts or other jointly owned property (such as houses or condos) also pass outside the Will.  These are typically designated “JTROS” (joint tenants with right of survivorship).

#2:  Dividing Your Estate:  Equal is Not Always Equitable

Are your children equally well-off?  If one of your children is a highly-paid executive, and the other is disabled and working part-time, you may want to leave a larger share of your estate to the child who has a greater need.   Or, if one child has been the primary caregiver when you needed assistance around the house, they may have ended up forgoing income or time with their own family.  In this case, you may want to leave more of your assets to the helper child.

Inheritances can be fraught, with the potential for resentment and jealousy between your heirs.  If one child is wealthy and another is struggling, dividing your estate equally could cause lifelong hurt and anger between the siblings – but bad feelings might also occur if you leave less to the affluent heir.  Communication is the best way to attempt to avoid or mitigate these issues.

#3:  Making Provisions for Disabled or Troubled Children

For people who have a disabled child, or one who has mental health or substance abuse struggles, leaving money to them outright may be inadvisable.   Each situation is unique, but there are steps you can take to maximize your heirs’ well-being.

In the case of a disabled child, you may need to protect them from losing government benefits.  In the case of an heir with substance abuse or mental health issues, you may want to prevent them from being able to act unwisely and squander the benefits of their inheritance.  Different kinds of trusts can help you to make sure the assets you leave to such children do the most good.

Unless you know you will have no estate when you die, it is crucial for you to consult with a specialized attorney if you have children or heirs with special needs.  Elder Law attorneys usually also do planning for people with special needs or who are disabled, while not every estate planning attorney specializes in these issues.

A good attorney will walk you through the process and help you achieve peace of mind about the decisions you are making to help your heirs.  Planning early, and reviewing the plan on a regular basis, are both important.  Decisions you make when a disabled child is 10 years old and you are 40, may need to change dramatically by the time you are 70 and your child is 40.

#4:  Why Avoiding Probate is Preferable – and Usually Achievable

Assets in your name as of your death, as opposed to those subject to a beneficiary designation or  a trust, cannot be transferred to your heirs or beneficiaries without  a court proceeding.  If there is a Will, the proceeding is called Probate, or if there is no Will it’s called Administration.

Probate and Administration are public proceedings, court appearances are required, and because a judge’s approval is required, neither you nor your lawyer have any control over how long it takes to be resolved even in the simplest of cases.  The uncertainty and hassle factors alone are worth avoiding.  Heirs and potential heirs must be researched and notified, and the Will can be contested for various reasons.

The delays, frustrations, and expense of court proceedings can be avoided if you create – and most importantly, fund – a trust that holds and controls your assets.  Trusts are private, they do not require any court proceedings, and they make the distribution of assets far simpler and more efficient.  At the same time, they can provide the same tax benefits as afforded under a Will.

Trusts may sound as though they are only for wealthy people – but that’s not the case.   A trust can allow its Trustee (its managing agent) to hold and distribute assets or income to a beneficiary or beneficiaries.  There are different kinds of trusts, with different rules and tax treatment.  Your attorney can explain how they work and discuss which type of trust is right for you.

#5:  You May Not Even Have an Estate, Unless You Plan for Health Care Costs

Most seniors will need long-term care at some point, either in the home or in a nursing home.  Long-term care is already ruinously expensive, and the cost is only going to go up.    You can create the best estate plan in the world, but without planning against this substantial financial risk, by the end of your life you may have no estate left.

In our firm we frequently meet with clients who have been paying $5,000 to $10,000 per month for home care, or $15,000 to $20,000 per month for nursing home care.  They didn’t think about the possibility of incurring these expenses when they were doing their estate plan, but then they suffered a health event and the money started to flow out.  It doesn’t take long for a chronic or critical health care need to wipe out your life savings – but it doesn’t have to be that way.

Elder Law planning has two important goals.  First, it can protect your assets from being depleted by health care expenses.  Second, the documents you put in place and the steps you take when you do Elder Law planning also work beautifully as your estate plan.


For most people, it pays to consult with an estate planning attorney who also practices Elder Law.  A competent Elder Law attorney will walk you through these and other considerations, making sure you know your options and can make the decisions that are right for you.

The result will be a well-thought-out plan that will protect your assets during your lifetime, and provide for the efficient distribution of your estate assets according to your wishes upon your death.

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