Estate planning: Protect your assets, ensure your wishes are carried out PDF Print E-mail
Written by By LOUISE SPRING, Staff Writer   
Sunday, January 03, 1999

An ultimate matter of privacy for the late Jackie Kennedy Onassis, her detailed last will, is available for public scrutiny at any time.

If she had preferred, it didn't have to be that way.

Had it been a living, revocable trust, for example, no one except her beneficiaries would have known its contents.

This is one of many situations that can be dealt with in advance if proper estate planning is done. It is an important consideration for anyone with money, property or other valuables they want to leave to their heirs.

It's also extremely important for farmers or owners of a family business who want their holdings to go to their heirs to be sure they've done their homework.

One of the primary estate-planning tools is a trust.

Trusts are nothing new. Both individuals and family businesses can take advantage of them.

Oliver Wendell Holmes once said, "Put not your trust in money; put your money in trust."

But where to begin, no matter what your estate size, may have you at wits end.

"The biggest misconception, in terms of simple wills, is that people think their property will go to the state," Plattsburgh attorney William Favreau said.

"(The state) controls by statute how your estate will be disposed of. It just may not go to the people you want it to go to," he explained.

First of all, Favreau said, people need to have a clear understanding of how the system works.

"Portions of the estate may pass by a bank-account or life-insurance beneficiary, regardless of what you've done in a will."

Trusts, he said, are accompanied by expenses (legal fees for a basic trust could run $1,500 or more) and loss of some control, but "you have to understand the process and benefits."

A trust is an asset holder to be managed in accordance with a trust document. Trustees take title to assets, subject to the terms of the trust.

It doesn't have to be complex; just be sure all financial bases are covered.


A primary consideration in estate planning is how much of the inheritance will go to the government in taxes.

J. Dan Recer of Recer Estate Services based in Washington, D.C., put it lightheartedly simple: "The difference between avoiding taxes and evading them is 10 to 20 (years)."

The good news, he said, is that estates are growing larger and people are living longer. "The bad news is gift and estate tax."

Estate taxes begin at 37 percent and go up to 55 percent.

For example, an estate valued at $750,000 is taxed at $50,000; for $1 million, the tax is $153,000; for $2 million, the tax is $588,000; and for $3 million, the tax is $1.098 million.

"There are a lot of strategies and devices in estate planning," Recer said.

For example, three simple words — "only my issue" (shall ever benefit from my trust) — can keep unwanted family or others who may benefit from your death out of the picture.

Dozens of different kinds of trusts (see box) can be established and tailored to individual needs.

Each is classified according to when it's created, who benefits, how assets are distributed or any of a number of other characteristics.

Recer said funded, living, revocable trusts should include homes, insurance policies, stocks, bonds and other assets. Another safety net is called a pour-over, which allows for anything not mentioned to go into a trust at the time of death.

All too often, family businesses are forced to sell assets, including farms, land and other large holdings to pay estate taxes that neither the estate nor the heirs could afford. This could be averted.



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