Tuesday, March 5, 2002

Estate Planning Philosophy

Tax planning is an integral part of estate planning. However, tax is merely one of many considerations.

We approach estate plans by first trying to identify the needs and desires of the client. After determining the client's overall objectives, we then design and implement a plan that will accomplish those objectives in a tax-efficient manner. The primary objective is always to make the plan fit the client rather than making the client fit the plan.

The objectives of estate planning vary from client to client. However, we have found that most clients have the following general objectives (the order of importance may vary).
  • Protect assets.
  • Control what is given, when it is given and to whom it is given.
  • Incur a minimum of red tape and a minimum of adviser fees.
  • Pay the least amount of tax possible.
A comprehensive estate plan will often rely on a whole range of planning tools, many of which must be in place well before the date of death. These include a tax-effective will and may also include living trusts (including spousal, joint spousal, family and alter-ego trusts), shareholder agreements (especially important for entrepreneurs), estate freezes and health care directives. If probate avoidance is an important concern, it may be that little or no portion of the estate will pass through the will. The exact plan depends on the overall objectives of the client.

The firm does not sell or otherwise deal in life insurance. However, members of the firm are familiar with the various uses of life insurance products in planning situations. Consequently, we are able to offer our clients independent advice on whether and how a specific type of life insurance product can fit into their overall plan (for example, by providing a tax-sheltered fund for paying taxes due on death).

-- Blair P. Dwyer

The above article provides general commentary of an educational nature. It does not constitute advice for any specific person or any specific set of circumstances. Because circumstances vary, readers should consult professional advisers in order to obtain advice that is applicable to their specific circumstances.