Practice What You Preach - Estate Planning for Young Attorneys
By Kathryn Grant Madigan
Kathryn Grant Madigan, president of the New York State Bar Association and a partner at Levene Gouldin & Thompson, LLP, in Binghamton, New York, may be reached at kmadigan@binghamtonlaw.com.
The untimely death of Anna Nicole Smith made headlines not only for the way Ms. Smith lived but for the way she died, leaving behind a legal quagmire that unraveled in courts as far flung as Florida, the Bahamas, and Texas.
Many families are forced to deal with similar issues everyday that are no less contentious or difficult just because they are not played out in the spotlight. Young lawyers are not immune. Lawyers in particular should get their own “house in order” and practice what they preach to clients about the importance of preplanning.
Here are some tips that will help you avoid leaving your loved ones in a state of confusion after you are gone:
- 1. Inventory your assets. Estate planning is like genius. It is 1 percent inspiration and 99 percent perspiration. Begin with a list of all your assets, including their value, title (or beneficiary), and location. Keep it up-to-date and accessible to your loved ones and your estate planner.
2. Execute a will. Your will is the cornerstone of your estate plan. Name an alternate for every beneficiary. If you have a young family, plan for the possibility of a common disaster by designating contingent beneficiaries beyond your spouse and children.
3. A trust is a must if you have young beneficiaries. Many young people in their twenties have difficulty managing even modest inheritances. Consider a trust for every beneficiary under the age of 25 or even older, depending upon the maturity of the beneficiary and the amount of the expected inheritance. Choose a trustee, and an alternate, who will exercise good judgment, and give the person full discretion to distribute the income and principal as needed. Leave the trustee a letter of instruction about your goals for your children or young beneficiaries and any other relevant information, such as your choice of advisors.
4. Nominate a guardian if you have minor children. Name the spouse first, and two alternates who are willing and able to parent your children until they reach eighteen. The guardian can, but need not be, the trustee.
5. Nominate an executor and an alternate. Your executor will make funeral and burial or cremation arrangements before your will is probated. Make sure the person is aware of your wishes. The executer will marshal and value your assets, pay your bills, distribute your estate according to your wishes, and fully account to your beneficiaries. It is an important and demanding job. Choose wisely. In the event of conflict or lack of suitable family members or friends, consider an institutional trustee or personal attorney.
6. Review life insurance and retirement assets. Many young lawyers, and their spouses, are underinsured. Consider additional coverage. Your bar association may provide economical group- term insurance. Conform the beneficiary designations to your overall estate plan. If you have a trust in your will for your children, do not name them as beneficiary; name the trustee under your will instead. Retirement accounts are often overlooked, even though they are likely to be your largest asset besides your home. Review and revise the beneficiary of your retirement assets as required, and make it a priority to set aside the maximum allowed in your retirement fund each year.
7. Review and update. Your will “speaks as of the date of death.” Review and update your plan as needed every three to five years or around life-changing events, such as marriage, retirement, relocation out of state, a birth, or the death of a loved one.
8. Power of attorney and healthcare directives. Incapacity is three times more likely to occur than premature death. The three major right-to-die cases, Quinlan, Cruzan, and Schiavo, involved young women. Name your spouse and at least two alternates on a power of attorney, often the same persons you named as executor. Leave the original with your lawyer for safekeeping. Make multiple copies of your healthcare directives and “paper the world” by distributing them to family and healthcare providers.
Don’t be the proverbial cobbler whose children had no shoes. If you are part of a gay or lesbian couple, the laws of intestacy are especially onerous. Protect yourself and your loved ones by taking the time—right now—to get your legal house in order.
Ready Resources
• Estate and Trust Planning. 2005. PC # 5430458. Section of Real Property, Probate and Trust Law. To order online, visit www.ababooks.org.
• For information on insurance offered to ABA Members, visit www.abendowment.org/ yld.asp
