Estate Planning

For the Long Haul Plans that fall apart

You're wise to review your estate plan, say the trust officer, the tax specialist, the Accountant, the solicitor - and even your wife. The trouble is that many a prosperous man has precious little to review.

Robert Ferguson, executive Director of FDS and a top planning authority, points out that too often the executive or professional man lacks even a basic plan, let alone one that's of maximum quality. And a leading author on estates, Robert Brosterman, adds: "In a typical large corporation only 10% of the management group will have all-out plans that really conserve family wealth."

An executive may have a written will. But in many cases it goes off on a tangent and fails to wrap up what may amount to a sizable part of his property. The major trouble is that only a man's house (if it's in his name), bank accounts and investments normally pass to his heirs via his will. His personal life insurance, plus company benefits - group insurance, pension, deferred compensation, and such - go to the family directly.

The company benefits, notes Brosterman, "can easily be worth £250,000 or more to the heirs of a top executive."


The will not only misses property, but' can be self-defeating in the bargain. An executive frequently will set up a trust for his wife by will, so that she and the children have the advantage of professional property management and guidance - a smart idea. But unless the trust is tied in, it misses all property passing outside the will. The result: The widow gets much of her inberi-, tance directly - and the trust idea falls apart. What's needed is a coordinated plan. One solution: a fringe benefit trust. You set up a revocable, living trust - it takes effect today, but can be revoked at any time. You give the trustee detailed instructions for managing and distributing your property when you die - as you would in a will - and put in your company benefit payoffs and possibly your personal life insurance. At the same time, your will is adjusted to instruct that any assets not already in the trust will "pour over" into it at your death, when the trust becomes irrevocable.

This arrangement - which top planners believe is safer and more efficient than similar provisions in the will itself - won't reduce estate taxes at your death. But it will ensure property management for your family under a unified plan, and enable you to make provisions that will eliminate estate tax when your wife dies.

A more involved plan uses a double-trust setup, with some items falling into a revocable living trust and others into an irrevocable trust that takes property out of your taxable estate. This is technical, though, and takes close advice on how to split up the items - and it varies, depending on your case. Reading up: If you want to review planning ideas before seeing an adviser, read Robert Brosterman's The Complete Estate Planning Guide (McGraw-Hill).


Interested inTake It Easy When Selling For A Tax Loss?

Counselling

People who think little of marriage counselling are missing the point. Marriage counselling is more meaningful today than you may imagine. More effective techniques are giving psychologists, clergymen, and others new skills in the art of counselling . If a middle-aged businessman, for instance, finds that stresses on the home front seem to be taking over, he might want to see a qualified man. He'll find no panacea. But he may get some surprising answers.

If you're the hard-driving executive type, it's possible that you may be a candidate for marriage counselling. "Don't be afraid of it," says Harvard psychologist Dr. George Goethals.

In considering this, note at the outset: Counselling