Case Study in Will, Trust and Estate Planning

CASE STUDY IN WILL, TRUST AND ESTATE PLANNING

Thinking about updating your estate plan? Whether due to the birth of a child, the death of a friend, reaching retirement, the sale of your business, reaching a certain age, or hitting the lottery, whatever the reason, most people eventually decide to see a lawyer about preparing a Will or updating their old one. By considering the particularities of a family's circumstances, the amount of wealth involved, and the desire to achieve estate tax savings and/or protection from creditors, what may start out in the client's mind as "updating my will" should result in the formulation of a comprehensive estate plan. This article will discuss the legal documents essential to both a basic estate plan and a more sophisticated plan in which estate tax planning for significant wealth is required. Obviously, specific recommendations require an analysis of each individual's or family's unique facts and circumstances.

The Basic Plan

Richard and Karen Murphy are each 50 years old. They have been married for 20 years and have 2 children, ages 17 and 15. They have old "I love you" wills executed years ago which simply leave all of their property to each other. As a result of a family friend being recently diagnosed with a severe illness, Richard and Karen finally decided to update their wills. Their accountant referred them to an attorney who specializes in estate planning.

Prior to meeting with the Murphy's, the attorney asks them to complete a confidential questionnaire listing their assets by fair market value and title. Their asset summary is as follows:

* Asset

* H

* W

* J

* Residence

* $250,000

* Mortgage

* ($50,000)

* Cash & Investments

* $85,000

* Life Insurance (group)

* $50,000

* Vacation Home

* $125,000

* IRAs

* $50,000

* $75,000

* TOTAL

* $100,000

* $75,000

* $410,000

Based upon this personal net worth statement, before the Murphy's...