Provided by the Law Offices of RICHARD MAYBERRY
MAYBERRY LAW FIRM
2010 Corporate Ridge
McLean, VA 22102
(703)714-1554

Committed to providing the highest quality estate planning legal services for individuals, families and businesses

     If you were to ask 10 adult Americans this question, you likely would get 10 different answers. Most erroneously equate estate planning with "death planning." They think estate planning is limited to arranging for the ultimate distribution of their assets at life's end. Due partly to this confusion and partly to good, old-fashioned procrastination, it is little wonder that seven out of 10 adult Americans have no estate plan at all.

     In reality, the ultimate distribution of your assets is but one of many important elements to a successful estate plan. If your estate plan were your "autobiography," then the ultimate distribution of your assets would be only the book's final chapter. The preceding chapters of your estate plan would involve a lifetime process of making legal arrangements to protect yourself, your loved ones and your hard-earned assets from three fundamental estate planning challenges: probate, estate taxes and unpleasant surprises.

Chapter 1: Probate
     Probate is the court process that takes care of people and their assets when they can no longer make their own personal, health care and financial decisions, and have otherwise failed to make proper plans to avoid it.

     You have two "opportunities" to experience probate: at incapacity and at death.

     The law says every adult American is responsible for their own personal, health care and financial decisions. What happens, though, if a stroke, a car wreck or Alzheimer's Disease leaves you disabled to the point of legal incapacity? Who will make your decisions for you?

     Incapacity probate is the "default plan" for people who fail to make plans to avoid it. The process involves legal proceedings that may be costly. It also requires a full disclosure of your personal situation (including your medical condition) and your financial matters (including an inventory of assets that you own or control). Finally, you then are placed under the ongoing supervision of the court.

     Like the incapacity probate, the death probate is the "default plan" for people who fail to make plans to avoid it. At your death, any assets that are titled in your name alone or that name your "estate" as the beneficiary (e.g. life insurance or retirement plans) will go through probate. One common estate planning myth is that a valid "Last Will & Testament" will avoid probate. Just the opposite is true. Your Will has no legal effect until it is presented to and accepted by the Probate Judge. Think of it as your Admission Ticket to Probate.

Chapter 2: Estate Taxes
     While no one enjoys the income tax with a top marginal rate of 39.6% or the capital gains tax with a top rate of 20%, most are shocked to learn that the estate tax starts at 37% and tops out at 55%. Consider this: the estate tax is a final tax on assets that may already have been subject to income and capital gains taxes…oftentimes repeatedly during one's life.

     Unfortunately, many people overlook estate tax planning. It is perfectly legal to structure your estate in such a manner that your estate tax liability is reduced or even eliminated. Some basic techniques may include changing the way you hold legal title to your assets (including life insurance) and establishing lifetime or testamentary trusts.

Chapter 3: Unpleasant Surprises
     Divorces, lawsuits and bankruptcies are some of the unplanned, unpleasant surprises that can deplete an estate. Because we are all vulnerable to these, and other "surprises" asset protection should be a component of every estate plan. Proper estate planning includes protecting your assets from unnecessary loss while you are alive as well as for your loved ones upon your death.

Chapter 4: Reprise
     Your heirs likely will face many of the same estate planning challenges outlined here. A well-designed, thoroughly implemented and faithfully maintained estate plan may not only protect you and your estate, but may also protect your assets to benefit your loved ones over multiple generations.

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Call Richard at (703) 714-1554
Email: mayberry@mayberrylawfirm.com