There are the philanthropists: Upon his death, Bill Gates plans to distribute most of his fortune through the Bill and Melinda Gates Foundation, which was set up to help reduce inequities in the United States and across the world.
There are the animal lovers: When Leona Helmsley died in August 2007, she left $12 million to her dog, Trouble, and allegedly cut two of her grandchildren out of her will. And former "Golden Girls" star Betty White plans to bequeath $5 million to her dog. (By the way, this is becoming much more common than you would think.)
Then there are the others, the ones we learn lessons from, such as Terri Schiavo. The Florida resident, who was on life support for 15 years after she collapsed in 1990, was the center of a political and moral battle on whether to take her off life support. The media took this opportunity to urge Americans to draft a living will, which Schiavo lacked.
Typically, a will dictates what will happen when an individual dies. It determines, within reason, their final resting place, their beneficiaries, and the distribution of their assets. But an estate plan, of which a will is certainly a component, involves so much more. For one, there are estate taxes, which many affluent individuals attempt to avoid for the benefit of their survivors. There are also related products and services that can help craft an effective plan, such as life insurance, lifetime gifts, and trusts.
But if you're feeling overwhelmed with all the options, just think of how your clients and prospects feel when faced with the task of putting all their assets in order.
They could seek the help of an attorney or accountant. Or, as many do, they could procrastinate planning their estate and simply assume that their assets will be distributed fairly and as they intended.
"Well, I only have one child, so obviously everything goes to her," or, "I've already discussed the matter with my children; they know who gets what," can be objections that agents often hear.
But it's never really that cut and dried. To continue the celebrity theme, take the aftermath of Anna Nicole Smith's death. Her supposedly outdated will left all assets to her son, Daniel, and specifically excluded any future children or spouses. A future child did indeed come along, however; Dannielynn Hope was born in September 2006. Days later, Daniel died. Smith followed in February 2007. So who gets the money?
Several media accounts have indicated that the courts are likely to place the inherited money in a trust for Dannielynn. But much of this legal confusion could have been avoided had Smith updated her will or simply used some foresight when initially creating it.
For those who leave behind a legal mess, well, that's their decision. But because of the nature of estate planning -- one could call it "death planning," just as some refer to the estate tax as a "death tax" -- many people simply don't want to face the prospect of their own death, and it's equally likely that it just seems like a big, unnecessary hassle.
But you, as their advisor, can be there to help them make essential decisions, line up the necessary documents, and even discuss the matter with other family members. And you don't have to do it alone, either -- a team of professionals such as yourself, other agents, and attorneys, for example, can and should work together to make sure all the bases are covered.
Our 2007 Estate Planning Guide discusses these and other topics, such as the 10 most common mistakes made by estate planners and the tactics needed to prospect for new clients. Estate planning may be complex, but with some guidance, it can be beneficial both financially and emotionally. You are, after all, there to help your clients make big decisions that impact both the present and the future.
Sincerely,
Christina Pellett
ASJeditor@AgentMediaCorp.com
