Here is a simple Estate Planning Quiz. Answer 8 short questions below, then click “Get Results” and see how you did. Explanations/suggestions for all answers will be displayed with results.
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Your answers are highlighted below.
Do you have a Will?
Question 1 Explanation:A Will can be a real trap because: 1) It guarantees your estate will go through the Probate process, costing time, money, and needless aggravation for your family. 2) It does nothing to help should you become incapacitated and unable to handle your own affairs, an increasingly likely situation as life expectancies increase. 3) Because it becomes a matter of public record, exposing not only your plans but also the value of your assets and identity of your beneficiaries, your Will invites interference by disgruntled relatives, contentious in-laws, and other meddlers and their lawyers.
Do you hold most of your assets jointly with your spouse?
Question 2 Explanation:If you're married, the estate tax law allows you an unlimited marital deduction for property you leave to your surviving spouse. Joint Tenancy with right of survivorship property qualifies for the Marital Deduction. It can result in couples wasting one or more of the available estate tax exclusions amount to which they are entitled, costing their family thousands, tens of thousands, even hundreds of thousands of dollars taxes easily avoided with some basic estate tax planning in advance.
If you have a Will, does it leave everything to your spouse?
Question 3 Explanation:A simple "I-love-you" Will, leaving everything to your spouse upon your death, can be a tax disaster for your family for the same reasons as joint tenancy ownership can. You may waste one or more of your available tax exclusions.
After you're both gone, did you leave your estate outright to your children in equal shares?
Question 4 Explanation:Most Folks want to treat their children equally. So they divide their estate into equal shares: one for each child. What could be fairer, right? WRONG!!
If your children are still young, consider this: one of them needs an organ transplant. Which of you wouldn't mortgage the house, sell the second car and max-out the credit cards to pay for the operation? Everyone in the family would pitch in to save the stricken member. Your obligation as a parent is to do the best you can with the resources you have to get your baby birds out of the nest. Only when that has been accomplished is it really time to divide up whatever's left into equal shares. For those with kids still at home, a family trust is the best approach to raising your family if you're not on the scene to discharge that responsibility.
For grown children outright distributions of shares of your estate may be a terrible idea too. If their marriage is unstable, if they have employment or debt problems, or if they just can't handle money very well, an ongoing trust can protect their shares from divorce courts, bankruptcy claims, and even their own imprudence (to say nothing of domineering sons and daughters-in-law.)
If you have a life insurance policy, do you own it yourself?
Question 5 Explanation:It can be a bad idea to own the life insurance policies on your own life because the entire death benefit under the policy will be part of your gross estate and thus subject to the Federal Estate Tax. Someone else should own the policy. Often it makes sense to have an Insurance Trust as the owner of the policy. But, it is very important to set up the trust before you buy the policy. This simple arrangement can save thousands of dollars or more!
Do You have a Durable General Power-of-Attorney to protect you in case of incapacity.
Question 6 Explanation:A Durable General Power-of-Attorney is a good idea, but unless it is very, very comprehensive it will not help in many common situations. (Our Power-of-Attorney documents now run 28 pages long, and they're growing!)
Worse, no matter how thorough your Power-of-Attorney is, by actual survey 50% of the time the bank, brokerage firm, title company or whoever simply won't honor the Power-of-Attorney! No matter what it says, They May Refuse It.
That's why lawyers have developed a far better solution for dealing with incapacity: The Revocable Living Trust.
Do you have a validly executed Advance Medical Directive appointing an agent to make health care decisions at times when you are unable to do so on your own behalf?
Question 7 Explanation:Many people already have a Living Will, the instrument that says how much (or how little) extraordinary care you want used to prolong your life if you're in a terminal condition. That's a good first step.
Some people even have a Power-of-Attorney for Health Care Decisions which appoints someone to make medical decisions when they are unable to do so on their own.
The better device is a combined document called an Advance Medical Directive written in accordance with the law of your own state (which makes it less likely that a doctor or hospital will hesitate to accept its validity.)
You might want to consider including in your Advance Medical Directive the provision authorizing your medical surrogate to request a Do Not Resuscitate (DNR) order from your attending physician, so that paramedics will not perform painful or aggressive (sometimes brutal) procedures to keep you alive at a time when your body is ready to slip away to a peaceful demise.
Find out more at one of our Seminars
Are you familiar with the so called "Reservoir Trust"?
Question 8 Explanation:In these difficult and unpredictable economic times, it is especially important to do all you can in your own estate plan to protect your family’s inheritance from lawsuits, foreclosures, bankruptcy - divorce proceedings – and unwanted interference by meddlesome in-laws or would-be gold diggers. Our Reservoir Trust is a way to set aside a pool of assets for your beneficiaries, available to them when and as needed, but sheltered from these outside threats.
There are 8 questions to complete.
Your answers are highlighted below.
| Question 1 |
| Yes | |
| No |
| Question 2 |
| Yes | |
| No |
| Question 3 |
| Yes | |
| No |
| Question 4 |
| Yes | |
| No |
| Question 5 |
| Yes | |
| No |
| Question 6 |
| Yes | |
| No |
| Question 7 |
| No | |
| Yes - but it does not expressly authorize my agent to request a DNR order from my physician. | |
| Yes - and it does include provisions for a DNR order. |
| Question 8 |
| Yes | |
| No |
Once you are finished, click the button below. Any items you have not completed will be marked incorrect.