Avoiding Probate and Estate Taxes
Three benefits you can share with your clients.
September 18, 2008
by Neal Frankle, CFP
It should never have happened, but it did.
Jim’s adult son Steve was concerned about his father’s financial “arrangements.” After many years' of hard work and smart investing, his father had accumulated a sizeable estate and Steve was worried about probate and estate taxes.
The problem was there just wasn’t any good time to bring it up. He and his dad spoke on the phone with one another often enough, especially since Steve’s mom had passed away, but it didn’t seem right to talk about such issues long distance. And even when he visited his father he didn’t feel comfortable asking his dad to “please pass the turkey, and, oh, by the way, what are you going to do with all that dough when you die?”
Steve knew that his father was a smart man and thought that perhaps Jim had already done the estate planning. Still the question remained in his mind and it caused concern.
Why Older Clients Should Speak With Their Children
It’s really too bad that Steve didn’t talk to his father. When Jim eventually died, a huge chunk of his capital went to pay for probate and estate taxes. This could have been avoided completely. To make matters worse, Steve and his two siblings spent thousands of dollars in legal fees fighting over the remaining money.
What can you do to make sure it doesn’t happen to your clients?
The best solution is for you to take the initiative and tell your clients to talk to you and their beneficiaries about their plans — now. Of course it’s their money and they can do with it what they like. But there are three major benefits that they reap by speaking about their wishes before they die.
By catching this mistake before they die, you could save your client hundreds of thousands of dollars. The only way your client knows if their estate plan is OK is if they check it out while they’re alive.
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Neal Frankle, CFP, is the author of Why Smart People Lose a Fortune: 5 Steps to Restoring Your Wealth and Sanity. He helps affluent clients establish and implement a safety-net strategy to protect their wealth. He also helps other professionals, such as CPAs, do the same for their clients. If you would like a free monthly e-newsletter (written especially for CPAs to use with their clients so they make better investments) please e-mail Neal.
* The material in this article is general information and not meant to provide specific investment, tax or legal advice. Investing in the stock market involves risk.