Should you seek the services of a CPA when doing more complicated estate planning, or is an estate planning attorney who is well-versed in tax matters preferable?
An estate planning attorney -- an estate planning attorney 10 times over, and not a CPA. You have to work with a lawyer who specializes in wills, trusts and estate tax planning.
||Is there any final advice or point you'd most want to highlight or emphasize to our readers?
For single women, a revocable living trust with an incapacity clause is so important. Actuarially, women live so much longer than men ... so, when a woman is all alone and she later gets a stroke or becomes seriously ill, who's going to pay her bills for her? Who's going to write her checks for her? That's why this type of trust is so very important.
Think about this situation: You have absolutely no money whatsoever, you work for a place that maybe offers you a half a million dollar life insurance policy or maybe you took out a million dollar term life insurance policy on your own. And you and your wife are killed in a car crash together. Your children are minors; they cannot inherit money. Where does your money go?
If you've left your children as the main beneficiaries after your spouse/life-partner on your life insurance policy, or there is no beneficiary left after your spouse/life-partner, it then all goes to the estate, it then has to go through probate. So now we have to go through probate with this life insurance, because you don't have a named beneficiary.
And if you name a child under the age of 18 as the beneficiary of any of these types of arrangements, and you die, the company will not pay out to a minor. They will require the court to establish a guardianship -- the fees for a guardianship can easily exceed $10,000 -- and put all the money in a blocked account at a bank with no access to the funds without a court order. Each year you have to go back and account to the court, and only when the child is 18 do they get all the money.
If you have a trust, then the trustee can immediately receive the proceeds of the policy or account, use it for the benefit of the children and not have to hand it over until they are older and more mature. And doesn't that make a lot more sense?