1. How can I tell if my estate plan is simple?
One easy way of testing whether your estate plan is simple is to try and explain it. Pretend you are sitting at a bar or coffee shop with a very good friend and the topic of estate planning comes up. Your friend is starting to consider drafting his or her own estate plan and wants to know what you did with yours. Would you be able to explain it to your friend? For that matter, would you be able to explain it without the use of charts and graphs? If you can, then you have a simple estate plan.
2. What if I want to take advantage of tax loopholes?
Keeping your estate plan simple doesn’t mean that you cannot take advantage of tax loopholes. It does mean, however, that you cannot take advantage of all the tax loopholes. It’s understandable that you would prefer for your money to go to your survivors instead of the government, but don’t set unrealistic goals. There’s no way you will prevent any of your money from going to the government, and trying to employ an overly complicated tax-avoidance strategy is more likely to backfire than to succeed.
3. Can’t I just draft it and forget about it?
An estate plan should be maintained, not forgotten about. As our lives change, so, too, should the goals and parameters of our estate plans. At the very least, you should make contact with your estate planner every five years.
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- Building Flexibility into Your Plan - September 10, 2020
