Advanced Estate Planning -- Conclusion Chart your course. . . .

Conclusion: Balancing Competing Goals

• Goals: Estate planning has competing goals. For example, saving transfer taxes on your assets will often reduce your lifetime control and benefit over those assets. The best estate plan for you is one which balances your objectives according to your own priorities. It is up to you "how hard you want to play the game."

• Going Beyond the Basics: The basic estate plan begins with a will or revocable trust. These articles have discussed advanced estate planning techniques and tools that go beyond the basics. Some of these tools can be combined to become even more effective. For example, the best asset for a "GRAT" (grantor retained annuity trust) may be an interest in a limited partnership (LP) or limited-liability company (LLC). The LP or LLC interest is entitled to a valuation discount, and the gift tax value of the GRATs remainder interest is also discounted based on the IRS's valuation tables.

• Costs: Each estate planning "tool" has its price. Before utilizing a tool, you must be committed to paying all of the costs.

  • Legal fees, accountants' fees, and other expenses are part of the cost of establishing and maintaining trusts and business entities.

  • The most sophisticated estate planning techniques often require expert appraisers who can determine valuation discounts for transfer-tax purposes.

  • Insurance trusts and buy-sell agreements also require a commitment to paying insurance premiums in order to provide the cash necessary to meet liquidity needs for taxes and business buyouts.

  • "If it's not worth doing right, it's not worth doing." It may be tempting to cut costs by: hiring inexperienced appraisers; refusing to employ qualified tax accountants; avoiding the use of corporate trustees; purchasing cheap insurance products; and even trying do-it-yourself documents for business and trusts. This is a false economy for most estate planning, especially where federal transfer-taxes are involved. For example, with respect to a multi-million dollar family partnership, a qualified appraisal can save you hundreds of thousands of dollars in estate taxes because of properly documented valuation discounts (and even discourage the IRS from disputing the discount in the first place). It would be foolish, then, to refuse to spend several thousand dollars for an appraiser who is an expert in valuation discounts.

• Going Forward: In order to determine some of the planning techniques or "tools" that may be appropriate for you, it is important to have a complete picture of your estate and your resources, including income sources, a description of your assets (including the current value and the cost basis for each asset). It is advisable for you to build an estate planning team that can coordinate their efforts for your benefit. The team may include your accountant (who often makes the best quarterback), your insurance advisor, your investment advisor, and business advisors (in addition to your estate-planning attorney, of course). Once the facts are known and your planning team is in place, the team can evaluate your estate planning options and make recommendations.

Do Something; Do It Right

If you have an estate plan, review it to make sure it (a) is up-to-date; (b) is complete; and (c) effective to accomplish your objectives. If you don't, consult an experienced estate-planning attorney in your area.

This is the end of these materials. Thank you for your time and attention.

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