While estate planning it can be a very involved and complicated process, it does not have to be that way. In fact, it’s often better to keep things simple. This is especially true in the area of children-grandchildren relationships. Many people are concerned about how their estate plan will affect these relationships. One way to do this is to practice simplicity in estate planning.
But what exactly makes an estate plan simple? One way to test for this is to see how easily the estate plan can be explained. If the attorney or the financial adviser recommending the plan cannot the document in a way you can understand, this is usually not a good sign.
Estate plan complexity can enter into the picture due to an attorney’s focus on tax-avoidance strategies. While this is an important aspect of good estate planning, it is only one facet of what makes up a plan. Another important facet is to ensure that there is an appropriate balance between fairness and flexibility for the family the plan is intended to serve. Sometimes tax-savings are best sacrificed for other important estate planning goals.
Another thing to keep in mind about estate planning simplicity is that circumstances change-including tax law, investments, and family structure, to name a few examples- so having flexibility is important.
In terms of fairness, balancing the needs of children with different talents, degrees of involvement with the family and needs can be a challenge. Navigating the waters in this area can be difficult. An experienced estate planning attorney, is immensely helpful in knowing how to balance out the various goals and considerations while keeping the estate plan as a whole basically simple.
Source: Wall Street Journal, “Best to Keep Estate Plans Simple,” Thomas Coyle, September 19, 2012.