Estate Planning for Every Woman

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What Stage Are You In?
by LanaSue McCormick

Would your silver tape measure bring $50,000 at a posthumous auction? Of course not. For openers, your tape measure probably isn't silver. Also, you aren't Jacqueline Bouvier Kennedy Onassis.

When we think of an "estate," most of us conjure- up visions of a focused woman of substance like Jackie Kennedy, who left a $200 million fortune.

Actually, though, everyone has an estate to manage-- and more modest estates need more careful planning because there is less room for mistakes. What shape is yours in, and how well is it guarded?

Here's a map that will help you understand where you are right now, where you want to go, and how to get there. There is no magic in it, just a clear look at the Seven Stages of Estate planning. You might be working several stages at the same time.

I: The Judge's Stage

This refers to the bureaucratic, they've-got-all-the-power groups-- probate court, IRS, Congress. On the average, estate tax laws change twice a year. Eldercare can vary from one county to another. The only protection against the power groups is knowledge and orderly implementation. This requires an expert team whose very profession is to stay current and ahead of the curve. The final taxes: Federal Estate Tax, and State Inheritance Tax are often called Voluntary Taxes. With solid planning, Malcolm Forbes discounted his tax-bite with carefully planned life insurance. Jacqueline Kennedy selected a charitable annuity trust to delay and discount her tax-bite. Using the basic four, team players can shield their heirs from tax problems.

II: The Creation Stage

The creation aspect is the beginning stage of estate planning - wills, guardianships, living wills, organ donation, advance directives, and the like. It is the cornerstone of the estate plan and needs to be addressed by everyone, newlyweds, singles, and blended families, as well as the 25% of traditional families who need to begin their plan. Incredibly, according to fortune Magazine estate planning special in December 1996, 60-80% of Americans have no will!

III: The Conquest Stage

People with fat pension plans, healthy IRAs, Keoghs, and deferred compensation plans may be in a good position for retirement living but might have created a war zone for their heirs. It has been reported in USA Today, August 1996, that Chief Justice Warren Burger, at one time the highest-ranking judge in America, died with a $1.8 million estate, but that because of a woefully inadequate will and errors made on his personal computer, the estate had shrinkage of over $800,000.

IV: The Kingdom Stage

Trusts are basically treasure chests into which you put your assets. Some trusts protect people, including yourself. Other trusts protect the assets from shrinkage by tax waste. Utilizing a team approach with your attorney, CPA, trust manager and insurance professional, you can find exactly what kind of sophisticated estate planning you need.

V: The Chaotic Stage
AKA "Sandwich Generation Woes'

This is where financial service professionals live. It services people who are divorcing and people caught in the middle who must plan for a college education, disabled relatives, their own retirement, and eldercare. There seems to be no relief for the super-responsible middle guy who rightfully feels, "When do I get a turn?"

VI: The Patriarch/Matriarch Stage

The American Dream was created on the premise of being able to control your own destiny, perhaps own your own business. All businesses, from railroads to utilities, began as family-owned businesses, but problems often arise with family relationships. The plunderers often are the ones inside the family business, the parasites are usually the ones hanging on. Sound estate planning devices can prevent the "shirt sleeve to shirt sleeve in three generations syndrome" in which the first generation founds the business, the second generation expands ft, and the third loses it.

VII: The Exodus Stage

Jacqueline Kennedy was able to set up a specially designed trust that sprinkled her favorite charities with $11 million dollars a year for twenty years. Her daughter is managing that legacy. With the help of a team of professionals, she created her Camelot. Some of us have legacies of collections of serving pitchers or gifts of writing talents. Identifying the special gifts our ancestors have passed down to us, and claiming those gifts, can allow us to be good stewards - using them, and then passing them on.

THE CONQUEST STAGE 
"ACE" Your Estate Plan

The keys to the CONQUEST stage are Accountability, Creativity, and Ethics (ACE).

If you love winning, feeling invincible, and being in a position of power and control over your life, welcome to the CONQUEST stage of estate planning. This is the best one because you are taking control. There is an old saying, "Wherever you are, be there!"

Start with a firm foundation in your plan to be victorious. Make sure solid major medical insurance, disability insurance, life insurance, casualty insurance, Pre-paid legal insurance, and basic 401(k) plans are in force. Once you have the basics, you're positioned to add frills. Does your hobby have earning potential? Is a home-based business feasible or desirable? Do you prefer a low-maintenance investment portfolio or do you want to study the stock market and be in an investment club?

Either begin your investment strategy with something as small as investing $25 a month from your household account into a solid mutual fund, or decide if a special interest of yours would benefit from extra attention from you.

Check with your CPA, insurance professional and internet resources to be sure your investments are positioned to help you defer taxes, build retirement, ensure your old age will be secure, and leave your loved ones without debt.

Ask your advisors for references and credentials Do they belong to the local, regional, or national estate planning councils? Check them out through the Cobb County Estate Planning Council, or one in your own area or online at www.naepc.org. Ask them, they will tell you if they are a member/leader in good standing.

Quality estate planning is economical, efficient and ethically rewards loved ones, projects and avoids waste and taxes.