Maximizing Estate Planning Benefits

Hands Holding Money Fan | Business Succession | Myatt & Bell

Dear M&B Clients & Professional Partners:

Justin R. MartinWe thank you for your trust and confidence in our firm through the years.  Our care and formality during the planning phases with our clients derives from our professional experiences with, mainly, three inevitable realities:

1. Death 2. Incapacity 3. Taxes.

From the client who brings his best attorney joke to the planning meeting to an adult child managing finances for the first time following the incapacity of his surviving parent, you’ll find us passionate about adding value and earning our keep at each of life’s transitions.

While each of our clients are unique in many ways, we have some various “gem” observations that seem true for most of our clients, two of which are as follows.

1. It’s best to talk about death and incapacity while we’re alive and competent rather than to wait to discuss such a topic upon our incapacity or at our own funeral. We’re just in a better place to be heard now!  Ignoring the gorilla in the room does not make it go away.  Talking about the gorilla, on the other hand, seems to reduce its size.  Where do we want to live?  How much should be spent keeping us in our home?  Who makes the decisions?  What do they communicate with others?  It seems that the hardest part for some clients is simply initiating the conversations.

This may be why our family meetings are proving popular, especially for clients with adult children.  We’ve seen that it’s a reason for the family to get together to talk about something that matters and, inevitably, will the bring the family together again when our client is no longer with us.Communicating the basics of a trust, explaining benefits of tax planning, reinforcing our desires to our health care and financial agents, and communicating other important aspects of our estate plan, are just some of the topics we review in our family meetings. After such meeting, we have found that the eventual beneficiaries also attain a little peace of mind because the venue provides a time for them to ask questions.  We hear that conversations, initiated in the family meeting, have continued into evenings where parents have shared deeper with adult children certain fears, concerns, and more personalized desires.  In our experience as a firm, we’ve never experienced negative results from a family that communicates. We also have found that the family meeting can draw together a family and help guide important communications.

Even though our children are all grown up with families of their own, there is a still a role for adult sons / adult daughters in the family unit.  After all, their care for us is a good family legacy that they’ll want their descendants and loved ones to follow.  Doing family as adults certainly has its messiness, but it’s worth it!

2. Clients that gift during life seem to enjoy what they have accumulated more than those who seemingly ignore the fact that they have accumulated more than they could ever spend. Maybe they simply have a healthier view of money.  We just can’t take it with us when we go.  In this section we’ll discuss two types of gifts: Lifetime gifts are ones we give while we’re alive.  2. Testamentary gifts are ones we give through our will or trust after our deaths. It often requires a financial advisor to advise us how much excess funds we actually possess.  Nonetheless, once the excess is identified, it will go to our beneficiaries either during our life or over our dead bodies!  Other than the obvious difference between lifetime and testamentary gifts, the remaining two differences are as follows:

First, we see the affects of lifetime gifts because we’re alive! We, therefore, have the opportunity to impart wisdom in the use to the recipient, whether they take it or not. As such, we have the opportunity to participate with them as they learn to manage the gift, budget, and invest.  Even for clients with children who already have proven capable of managing the gift, it may create opportunities for new conversations as we watch our children live a reality that we helped make possible.  While different than our own, it’s another experience that we’re involved in and share as a family.

The other major difference is that it can save significant taxes!  We had a client this year in his nineties gift $1 million to each of his two children, reserving $1 million for himself and another $1 million in a credit shelter trust.  The affect eliminated estate tax completely on a former $4 million marital estate.  To learn more about gifting, including some pitfall avoidance, attend our gifting seminar on October 10th at 4pm.

From our experience, since 1960, let us help you create peace of mind when its needed most. Call Myatt & Bell, P.C., at 503-641-6262, to setup your annual review, gifting meeting, or family meeting appointment.

-Justin R. Martin

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