You don’t need to do a thing.

PlanLab^® was previously programmed to illustrate the laws as written for 2010, 2011 and beyond:

• No federal estate tax in 2010
• Limited step-up in basis for 2010 deaths
  • Step-up of $1.3 million in property from a decedent
  • Step-up of certain transfers to spouse up to $3 million but not available for all assets
• Gift tax maximum no greater than income tax highest rate
• Reversion to pre-2001 Tax Act in 2011
• These are just the main points, but all provisions are included.

If the first death occurs in 2010 and the spouse sells inherited property later, PlanLab^® with its true cash flow calculations will reflect the capital gains and subsequent estate taxes correctly. You can show the effects of the current legislation. PlanLab^® Analysis programs all illustrate true cash flow, including:

• Estate Tax Analysis
• Wealth Distribution Analysis
• Retirement Test Drive
• Financial Needs Analysis
• Financial Strategies
• Wealth Strategies

PlanLab^® Conceptual programs like Estate Tax Concepts and Family Limited Partnership illustrate the estate tax rates correctly but do not provide cash flow details.

You can count on your PlanLab^® illustrations to provide the proper estate taxes with certainty, even as Congress continues their uncertainty! And when new laws are signed, PlanLab^® will be among the first to provide updated illustrations.

Perhaps the first question should be, “What does a will do?” Your will determines how any property you own at death will be distributed to your heirs – provided you have not made other arrangements.

What other arrangements would you have made? In some cases, you bought property that the deed states who gets it at death. For example, the deed to your home probably lists you and your spouse as joint tenant with right of survivorship – which simply means that if either of you die, the survivor owns it all. Ownership transferred by deed is not affected by the will. Contracts you have made usually state who the subsequent owner will be if the owner dies. An example of this type of contract is a life insurance policy. Also, a business owner may have agreed to a “Buy and Sell Agreement” with a partner or co-owner. If the contract provides for the successor owner, then it is not affected by the will.

Your will expresses how you want your remaining property to pass. But did you know that if you have not written a will, your state government has done it for you? If you die without a valid will, your assets will pass to your heirs according to state law. Each state writes its own intestacy laws that serve as a “generic will” for its residents. Without even knowing what the state will (intestacy law) says, you probably find it offensive to think the state will decide who gets your properties. Creating your own will allows you to express how you want your remaining properties to pass.

Law—Their Way

Lawmakers design the intestacy laws based on what they think you would want to happen. These laws vary from state to state.

Usually, the distributions occur as follows:

• If your spouse survives you, and you have no children, your spouse inherits the estate. However, in some states, your parents and your spouse split the estate or any real estate.
• If your spouse and children survive you, each inherits a portion of the estate, even if the children are minors.
• If only your children survive you, they inherit the estate, and if they are minors, the court appoints a guardian for them.
• If you have no surviving spouse or descendants, your parents inherit the estate. If your parents are deceased, your siblings inherit the estate. If you have no surviving siblings, your next of kin inherits the estate.
• If you have no next of kin, your state of residence takes over possession of your estate.

Will—Your Way

Creating a will allows you to express how you want your probate property to pass. Probate property consists of any assets not contractually promised or jointly owned.

Advantages of a Will:

• You choose who gets your remaining property.
• You designate an executor of your choice to carry out your intentions.
• You can design your will so that you actually reduce estate taxes.
• You can appoint a trustee and/or guardian to manage your assets for your minor children.
• You can amend or revoke the will at any time.

Why create a will? A will allows you to distribute the property you worked a lifetime to accumulate to whomever you choose. A will must meet certain requirements to be valid in your state. Always seek legal advice in creating or changing your will. To be sure your will works as you intend, always consult your legal counsel before signing any contracts or deeds, as they can undermine or contradict your will.

Why create a will? It’s as simple as making distributions at death your way, or their way.

Experience

How long has the attorney been doing estate plans? It normally takes years to become proficient in estate planning as there are a number of specialties within the estate planning field such as probate, related litigation, trust administration, valuations, taxation and tax appeals, insurance arrangements, business succession, and more. It is also very important that the estate attorney know what they don’t know! Only years of experience allows an attorney to spot those areas where further expertise may be needed.

Does the attorney have ample and available resources and expertise to handle any complex issues that may arise? No one attorney is expected to know all the answers, but experience is the best way for an attorney to learn where and how to obtain any needed answer. Remember, experience is not always measured in length of time.

Understanding Clients’ Needs

Can the attorney relate to the client? If the attorney does not have the same values and similar life experiences as the clients, it is difficult for them to understand the needs and feelings of the clients. Estate planning is a very personal, feelings-based process, but uses complex and detailed techniques and approaches. For the attorney to get the complex stuff right, they must understand the underlying emotions with which these techniques handle. If the attorney’s real life situation mirrors yours, have they done what they are asking you to do? Do they practice what they preach? The client should always feel that if the estate planning attorney were in the identical situation, he would take the same advice he is giving the client.

Costs

How is the attorney paid? There is not a standard arrangement or fee, but the client needs to know how, when, and how much before starting the process. A clear understanding at the beginning assures no later surprises. The fee may be only a small fraction of the savings afforded the client’s family, which can still be a sizable dollar amount. Questions clients should ask:

• Is there an initial consultation fee? Often there is a charge made for the first meeting in which both the clients and the attorney are determining if they want to continue the estate planning process with each other. If the client cannot relate with the attorney, or the attorney realizes that he cannot fulfill the needs of the clients, this minimizes everyone’s time and costs.

• Is the initial fee waived if the estate planning services of the firm are retained? Often, the initial fee is applied to the overall cost.

• Is there a flat fee if the estate planning services are retained? And, what exactly does it cover? Are telephone or email inquiries included? Many estate attorneys charge a basic flat fee that includes the entire process. Some charge for the initial consultation, and an hourly charge thereafter, as well as any special services such as appraisals, etc.Special rates when referred by specific financial advisors are often quoted. Based on the completeness and quality of the advice the client may have already, or is in the process of receiving, from a financial advisor, allows the estate planning attorney to reduce the normal fee. As the legal partner within an estate planning team, the attorney knows that they will be primarily responsible for the legal work, but will not need to take the primary role in all aspects.

• What additional charges may be expected? Special legal work or research may be required that will require special attention and additional fees or hourly charges. These matters and rates should also be disclosed when rates are being discussed.

• When are any fees payable? Are the fees payable in advance, monthly throughout the process, or half now and half upon completion? A clear understanding at the start of the process prevents the costs or billings from distracting from the planning process. Experienced estate planning attorneys welcome these inquires.

Taxes and Trust Administration

What experience does the attorney have with trust administration at a client’s death? An attorney who has administered trusts at death is better able to draft the clients’ trusts so that they are easily administered. Estate taxes, state inheritance taxes, probate, income taxes for the estate, gift taxes, and trust taxation are not your ordinary taxes. The estate planning attorney must be knowledgeable with all of these taxes as the drafting and execution of many legal documents will affect these directly. Also, they must be able to explain the tax issues and their effects on various planning strategies techniques. However, most attorneys don’t offer specific tax advice and refer that to certified public accountants.

Will the estate planning attorney be available and able to help with any trust administration at death? Many strategies and techniques involve the creation of trusts at the client’s death. Will the estate planning attorney be there to help the beneficiaries of the trust and the trustee make the strategies work? The experienced estate planning attorney has helped with trust administration many times and is better able to draft trust documents that work as planned.

Be There for You

Will the estate attorney be there for you, your family, and your business? The client needs to be able to answer this question, “Yes.” The best one to administer an estate plan at death is the one who helped create it. If the attorney is not there, will the firm be there? The estate plan represents a lifetime of work and love for his or her family. The client should always have the trust and confidence that his or her wishes will be carried out in the manner they have chosen.

By getting these questions answered, and finding an estate attorney they can trusts, clients can have the confidence that their wishes will be the result of their planning.