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Advance estate planning is the wisest approach

In the age of the Internet, it should not surprise readers to learn that several websites are available to help individuals with end-of-life planning. According to one reviewer, the approach taken by such sites is analogous to how one might plan for other big events, complete with sample to-do lists, reviews of various companies and service providers, and correspondence templates.

Such online sites may be a good starting point to help individuals begin thinking in general terms about how they might administer their estates. However, an attorney knows that the nuances of estate tax, inheritances and long-term financial planning cannot be captured by a one-size-fits-all approach on an Internet site. 

Although a do-it-yourself will or other estate planning document may appeal to the independent minded, the process of probate can be lengthy, confusing and needlessly expensive. In fact, there might even be options for avoiding probate or reducing an estate’s potential tax liability. For example, trusts are remarkably flexible, used for purposes ranging from the protection of a child with disabilities to asset preservation. Intervivos transfers, made during an individual’s lifetime, are also exempted from federal gift taxes up to a certain amount each year, and per recipient. In 2014, the annual exclusion is $14,000.

An attorney’s expertise may be needed to attend to fiduciary accounting issues and oversee the preparation of federal estate tax and state inheritance tax returns. Of course, a comprehensive estate plan should also prepare for the possibility of a grantor incurring unexpected costs during his or her lifetime. Such costs may include nursing home and Medicaid planning. An attorney can provide valuable insight and assistance in these areas of estate planning.

Source: New York Times, “Navigating the Logistics of Death Ahead of Time,” Tara Siegel Bernard, March 28, 2014

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Larmore Scarlett LLP

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