The estate you leave behind – everything from your cash and investments to the family home and heirlooms, and even reflections of your traditions and values – will go a long way toward shaping how you're remembered by your family. Whatever the size of your estate, when it comes to getting help planning for that day and making sure your assets are distributed according to your plan, you don't want to hire just anyone. Unfortunately, unlike with many professions, anyone can call themselves an estate planner, even though estate planning is one of the most complicated financial transactions you'll ever be involved in. "Anyone can say they're an estate planner," says Michael Wald, an estate-planning attorney in Richardson. "You see it all the time on TV. It means nothing. They are no more estate planners than your grandmother."
The first step is to decide how much estate planning you need. If you make an average income and don't have a complicated estate, a family attorney can draw up a simple will for you. That's the bare minimum that everyone should achieve, because dying intestate – without a will – causes unnecessary complications for your survivors. "Even with a moderate amount of money, to avoid family squabbles, it's going to make the handling of your estate so much easier than if you died intestate and you had to go through the court-supervised administration of your estate," said Brad Carson, managing director of trusts at U.S. Trust in Dallas.
If you have a more complex estate and many assets to bequeath, your estate planning team can consist of several people:
Estate planning attorney: A lawyer will be able to create a trust, draft your will, a durable power of attorney, medical power of attorney and a living will.
Financial planner: A planner should have an overall perspective of your financial situation and understand your wishes for your estate.
Certified public accountant: A good accountant can minimize the tax ramifications of your plan.
Insurance agent: An insurance agent should be familiar with estate-planning concepts, such as an irrevocable insurance trust.
A must-have
No one should attempt estate planning without including an attorney. "Many people in our field will say that estate planning is one of the services they perform," said Michael Busch, a certified financial planner and president of Vogel Financial Advisors LLC in Dallas. "I've found that most will do it for the purpose of the big-picture perspective, and they will bring in an attorney to draft the documents." By the same token, a good attorney won't try to do it all himself. "Estate planning is a very tax-sensitive sort of thing," said Norm Lofgren, a tax lawyer at Looper, Reed & McGraw in Dallas. "Does the person have fundamental tax skills? If you don't have fundamental tax skills, that can be a recipe for problems." It should be a big warning sign if an attorney also sells investment products, Mr. Wald said. "There is no way that an attorney can be objective about the planning when they will earn a commission for selling a certain type of product," he said.
Estate tax
Illustrating the complicated nature of the process is the fact that the estate tax law is still up in the air. Congress enacted a temporary phase-out of the estate tax when President Bush took office in 2001, but tax rates would snap back to as high as 55 percent if the law expires as scheduled in 2011. Under the current law, $2 million of an estate is exempted from estate taxes for an individual and $4 million for a couple. Because the fate of the estate tax is unknown, "the planners are just trying to create very flexible documents that give their clients a lot of flexibility to not get locked into anything," said Mark Luscombe, principal federal tax analyst at CCH, which publishes tax information and software for tax professionals.
Check backgrounds
The best way to make sure you have the right people working for you is to check out their credentials. Be careful of people who call themselves estate-planning experts who list an alphabet soup of unfamiliar professional designations after their name and entice you to attend their seminars with a free dinner. "You need to find out whether or not the person's credentials are real," Mr. Lofgren said. "You see all these fliers with all these people with strings of letters after all of their names. You've just got to be careful." A lack of credentials is a big red flag. "Even if an attorney is not credentialed by one of the national or state organizations, they should be members of the estate-planning or probate section of the local bar and regularly attend those meetings," Mr. Wald said. "If they don't, that would be a red flag."
It's about you
Most important, make sure a lawyer doesn't make a quick assumption of your estate-planning needs. "These attorneys give everyone the same plan, fitting all the different-size clients into the same round hole," Mr. Wald. "For example, some attorneys think everyone needs a revocable trust." Said Mr. Lofgren, "The question is: Do they know how to cause your property to be disposed of to whom you want, how you want and in the most efficient way that you can?" But beyond the technical skills and the fancy certifications, find someone you feel comfortable with. "Look for somebody who takes the time to listen to you and what your goals and objectives are before they start throwing out ideas and suggesting structures," Mr. Busch said.
CHECK THEM OUT
Here are the top credentials and memberships for the estate-planning profession:
Board-certified by the Texas Board of Legal Specialization
To become board-certified in a specialty area such as estate planning and probate law, an attorney must have been licensed to practice law for at least five years, devoted a required percentage of practice to the specialty area for at least three years, handled a variety of matters in the area to demonstrate experience and involvement, attended continuing education seminars regularly, been evaluated by fellow lawyers and judges, and passed a six-hour written examination.
An attorney must apply for recertification every five years and meet substantial involvement, peer review and continuing legal education requirements for the specialty area. "To choose an attorney estate planner, you should look for someone who does this type of work more than 50 percent of the time," says Michael Wald in Richardson.
Search www.tbls.org or call 512-453-7266 to verify certification.
Accredited Estate Planner
Candidates for the designation from the National Association of Estate Planners and Councils must have estate-planning experience and recommendations from colleagues. They also must complete certain graduate estate planning courses. The association also confers the designation of Estate Planning Law Specialist to lawyers practicing in the estate-planning area who pass an exam.
Go to www.naepc.org or call 1-866-226-2224 (toll-free).
The American College of Trust and Estate Counsel
Fellows are selected on the basis of professional reputation and ability in the fields of trusts and estates and on the basis of having made substantial contributions to these fields through lecturing, writing, teaching and bar association activities. Members are nominated and elected by other members. "Have they written anything in professional journals?" says Norm Lofgren at Looper, Reed & McGraw in Dallas. "If you're teaching at seminars at the ABA [American Bar Association], state bar associations or local bar associations, that tends to indicate that your peers think you're pretty knowledgeable."
Fellows are listed at www .actec.org or call 310-398-1888.
Michael H. Wald, 2006 Director