Estate Planning

What is Estate Planning?

More than the drafting of a will, today’s estate planning process can involve not only the distribution of your property after death, but also financial, tax, medical and business-succession planning.

You may have wondered what is involved in estate planning and whether you need an estate plan. Estate Planning is a process that involves your family, your CPA, and your attorney. During this process, you can plan for the future in various areas. I’ll go over the process and what questions it might involve, and then I’ll look at some of the documents used in estate planning.

What Estate Planning Can Cover

The process of estate planning can address the following questions:

  • Who will receive my assets after my death?
  • How will they be distributed?
  • Who will be my children’s guardian after my death and the death of my spouse?
  • How will my bodily remains be disposed of?
  • What are my desires regarding life-sustaining medical treatment?
  • If I become too ill or otherwise unable to manage my own affairs, who will take care of things?
  • If the person I love/live with is not my spouse, how can s/he be permitted to make medical decisions for me, instead of my family?
  • Who will run my business after I retire?
  • How can the transfer of my business to successors be accomplished smoothly and cost effectively?
  • If I or my spouse needs nursing home care in the future, how can our assets be preserved?

While it may be difficult to approach these questions, dealing with them now can help you to avoid problems later.

Estate Planning Terms

In addition to a will, trusts are often used to accomplish estate planning objectives. Briefly, a will states your intentions regarding to whom and how your assets will be given away, and who will be guardian of your children, after your death. On the other hand, when you put property into a trust , you enter into an agreement with the trustee. The trustee holds the property for the stated length of time and under the stated conditions, for the benefit of the beneficiaries – those whom you wish to get the trust’s income of principal. The trust allows you to give away income or property, and to place restrictions on the time or manner in which the donee (recipient) will receive the property. Trusts are also important in planning for estate and income tax savings.

Medical treatment decisions are normally made and communicated by a patient. However, when the patient is unable to speak for her/himself, next-of-kin are consulted by medical professionals in arriving at treatment decisions. Problems arise, and decision-making is complicated, when the patient is undergoing aggressive life-sustaining treatment with little or no chance of returning to consciousness or recovery. In that case, the “life-sustaining” treatment merely serves to extend and delay the death process. When a patient’s personal preferences are known, these can be followed in making choices of treatment or decision to refuse or terminate treatment.

The best way to express personal preferences is in a Living Will or Advance Health Care/Medical Directive. This document lists different kinds of treatments, shows the preference of the person, and may also appoint someone (a proxy or surrogate who may speak for the person if s/he is incapacitated from making and communicating those decisions. This is especially important in non-marital relationships, where the law does not provide decision- making authority to the partner of the patient.

In planning ahead for clients concerned with the ongoing administration of their financial affairs in case they are [even only temporarily] incapacitated, a Durable Power of Attorney provides a means of appointing someone who can act during the period of incapacity. Having a Durable Power of Attorney can also avoid the expense, inconvenience, embarrassment and humiliation involved in the legal procedures to appoint a guardian for an adult, which involves going through an incompetency adjudication.

The drafting of the estate planning documents is done by the attorney. The CPA, who is familiar with the client’s assets, performs the analysis, calculations, and data-gathering necessary to put the client’s estate planning goals into action, and makes suggestions for the saving of estate and income taxes.


Just about everyone needs an estate plan — it’s not only for the rich. The size and complexity of a client’s estate determine the level of sophistication needed for the estate plan. Clients who deal with the difficult questions involved in estate planning in advance have a better chance of avoiding unnecessary future problems and costs.