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Ned almost lost the farm that had been
in his family for 8 generations! We’ve all heard that ‘The Devil is
in the details.’ It is especially true when it comes to estate
planning. Make sure you don’t make the same mistake Ned did.
Ned and Nellie Mae were in their early 80’s. Even though they had
been happily married for over 30 years, they each had children from
a previous marriage. About 10 years ago they became concerned about
the amount of estate taxes that would be due on the family farm when
they died. They’d heard the nightmare stories about losing the farm
to Uncle Sam and they wanted to make sure it wouldn’t happen to
them!
So Ned went to see his local attorney. He told the attorney about
their estate tax concerns and also that he wanted to make sure the
farm went to his children—stayed in his family—instead of going to
his stepchildren when he died. Well, the attorney told Ned what to
do and, obediently, Ned and Nellie Mae implemented that plan over
the next 9 years.
That’s when I got involved. The attorney’s advice sounded good, but
the Devil is in the details! And the attorney missed a few details
that left Ned holding the bag.
The result was that if Ned had passed away, his share of the farm
could have gone to his stepchildren instead of his daughters—the
very thing he was trying to prevent!
The attorney’s plan was also supposed to reduce the amount of estate
taxes that would have to be paid, but because the attorney missed
one small detail it would be as if the plan had never happened,
leaving a $750,000 tax bill! They followed a plan for 9 years and
were right back where they started!
Fortunately, I was able to help Ned and Nellie Mae get the chaos
that had become their estate plan quickly and easily sorted out.
With the help of a competent attorney, Ned and Nellie Mae now have
the peace of mind that what they want to happen, will happen.
Their estate taxes have been drastically reduced, possibly even
eliminated. Just as important, Nellie Mae’s children will get her
portion of the estate and Ned’s children his. The farm that has been
in his family for 8 generations will stay that way for a few
generations more.
To their credit, Ned and Nellie Mae did everything they were
supposed to. They were proactive in recognizing that they needed to
take action to reduce their estate taxes. They knew they needed
legal documents in place to dispose of their estate according to
their wishes, minimizing any conflict between the children.
They sought out an attorney to help them. They followed the
attorney’s advice and did what they were supposed to. So what went
wrong and how can you avoid making the same mistake?
The only mistake Ned and Nellie Mae made was not working with an
attorney that specialized in handling complex estates. Their
attorney was a generalist. Being in a small town he did a little bit
of everything, legally speaking.
Just like in medicine, it is hard for any attorney to be an expert
in all areas of the law. You may have a family doctor, but if you
need a heart transplant they will refer you to a cardiac specialist.
If you have severe foot problems they will refer you to a
podiatrist. If you have hemorrhoids…well, never mind, you get the
picture!
Ned and Nellie Mae’s attorney knew in general what they should do,
but since he wasn’t an expert in the area of estate planning he
missed a crucial detail.
It’s the same way when it comes to handling all of your financial
affairs. For all but the simplest cases, you should be working with
someone who specializes in the areas you need help. For instance, I
specialize in Estate Planning, Insurance and Investments for
affluent seniors, retirees and near-retirees. Others specialize in
company retirement programs, etc. Work with a competent professional
that specializes in your situation.
Don’t be left holding the bag! Go to www.guardingyourwealth.com.
While there, be sure to tell us your story. Maybe others can keep
from making the same mistakes.
Mr. Voudrie is a Certified Financial Planner and President of Legacy
Planning Group, Inc., a Private Wealth Management Firm in Johnson
City, TN. He can be reached toll-free at 1-877-827-1463 or at jeff@guardingyourwealth.com |
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