Cynthia Leach

Accountant & Estate Planner

The possible problems with your plan may be:

1. Assets may not pass according to your wishes.
2. The federal government and the state in which you live may get much of what you own.
3. Your family and friends may suffer undue inconvenience.

This guide will show you how to avoid these problems with effective estate planning.

Many people feel that estate planning is an unpleasant and morbid subject. They put it off because they are "too busy," or because they think they don't own enough assets for planning to matter, or because they don't like to think about death.

There is no doubt that estate planning can raise some difficult emotional issues. Unfortunately, if you ignore those issues now, you may cost your family thousands or even millions of dollars later, as well as cause considerable anguish. Proper estate planning takes far less time and effort than most people imagine, and it can give you tremendous peace of mind.

If this is your first attempt at planning your estate, we recommend that you start by reading "Getting Started." In this section, we explain how property is transferred after someone dies. We help you figure out what you own so that you can make informed choices about disposing of it. Finally, we introduce a financial planning process that will give you a new, more thorough way to approach solving personal finance problems.

Certain documents are key estate planning tools: a will, a living will, and a durable power of attorney. Regardless of your age or level of wealth, if you do not have these documents or have not updated them recently, you should read Chapter 2, "Estate Planning Documents."

Estate taxes can be a big concern -- perhaps because estate tax rates can be as high as 55%. However, with proper planning you can minimize or eliminate your estate tax bill. If your estate is worth more than the excess of the applicable exemption amount ($650,000 in 1999, increasing to $1,000,000 in 2006) and you think that you might be subject to estate tax, review Chapter 3, "Estate Taxes." In addition, you should review the section Preserving and Transferring Wealth.

A trust is a legal structure that you can use for a variety of needs, ranging from competent asset management, to avoidance of probate, to flexibility in planning for others. In addition, trusts can provide estate and income tax savings opportunities, particularly as asset values increase. If your estate planning includes needs such as these, you may want to review Chapter 4, "Trusts."

Most people don't realize how complex their financial lives are. Chapter 5, "Recordkeeping," will help you organize your records and will help others who may have to work on your affairs at some point.

Sooner or later, we all find ourselves coping with death. Chapter 6, "Coping with Death," will help you understand the legal and financial aspects of death and will give you some practical suggestions about what to do when a loved one dies.

Some estate planning principles, such as making wills, apply to everyone. As a result, in Chapter 7, "Questions and Answers About Estate Planning," we cover several estate planning concepts and questions of general interest.