Many of our clients come to our firm not just for an estate plan, but as part of a larger goal to get serious about their finances and protect their assets and family. An estate plan is a HUGE step toward that goal, but it is only one step. Other steps include being proactive about your taxes, reviewing your investment portfolio, and creating a solid retirement plan.

Our firm can give you the very best estate planning and asset protection, but the other steps may require the help of a financial advisor. Each client’s situation is different, of course; you may already have a financial advisor and have taken these other steps (many of our clients are at our office on the advice of their financial advisor, in fact), but if you haven’t, finding an advisor you are comfortable with can be a challenge.

Because estate planning and financial planning go hand in hand, our firm has relationships with a number of top notch financial advisors, and we are happy to make the introductions. Having an estate planner and financial planner who are already acquainted can have many benefits. In addition to getting a referral from a source you already know and trust, you can be sure that any financial advisor we recommend has already been vetted, and all communication and collaboration between us for your benefit will be smooth and effortless. Don’t hesitate to call and take advantage of our experience.

If you still choose to search on your own, this article in The Wall Street Journal has suggestions on how to interview and choose the best financial advisor for your family. Either way, be aware of all the steps needed to reach your ultimate goal of financial security.

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Everyone knows that March and April are tax season, when everybody scrambles to get their taxes done, mailed off, and out of mind for the rest of the year; but according to this article from Reuters the taxes you pay in April can be significantly lower if you take the time to think about them now.

Author Linda Stern recommends mid-year as the best time to start thinking about your taxes because it gives you plenty of time to take advantage of various planning strategies and tax breaks, many of which she outlines in her article. Stern also points out that scheduling an appointment with your accountant in July—when accountants are not nearly as busy as March or April—means you’ll have more one-on-one time to strategize and discuss your financial situation.

Stern’s article is full of good advice and suggestions for saving on your taxes this year, but she forgets one important strategy: Creating your estate plan. Talking to a lawyer about your estate plan not only helps in understanding and organizing your finances, and protecting your assets for the future; but the money you spend in creating an estate plan can be tax deductable. Talk to your lawyer and accountant now about how you can protect—and save—your money in the future.

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The realm of personal finance is in the midst of being revolutionized. The crash on Wall Street has made many armchair investors mistrustful of professional financial advice, and many people are now taking the time to manage their own personal finances with the focus shifted from investing and earning to budgeting and saving. The problem is that after all the effort people put into learning how to spend and play the market from their laptops, many now don’t know how to budget and save responsibly.

This is where the revolution begins.

A recent article in The Wall Street Journal has collected some of the best websites on the internet to help you keep track of and plan your finances. These online tools run the gamut of personal finance categories; from budgeting your household expenses to creating a financial plan to managing personal loans between friends and family. And these aren’t just educational resources, these are interactive tools to help you implement the processes you prefer—and many of these tools are free.

We hope our readers will find these resources helpful, but if you are one of those who would still like the advice and services of a professional financial planner and aren’t sure who to trust, please contact our office. We work with a number of reputable financial professionals, and would be happy to recommend one who would fit your family’s needs.

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Many people count on life insurance to pay their estate tax when they pass away (allowing their heirs to keep non-liquid assets such as real estate without having to sell immediately), and this has always been a fairly safe and reliable strategy—as long as you’re keeping track of your policy. Arden Dale’s article in the Wall Street Journal warns that current low interest rates are wreaking havoc on some insurance policies, leaving the owners without that safety net when the time comes to pay estate taxes.

“The policies are imploding because of low interest rates. An insurance plan issued years ago, when interest rates were higher, may no longer be earning the investment returns it needs to pay premiums as drafted. That shortfall leaves the owner on the hook for unexpected costs.

“If the worst happens and a policy collapses, its demise can even result in a big tax bill.”

If you aren’t sure of the status of your insurance policy talk to your financial planner or insurance representative to find out, then be sure to call your estate planning attorney to update your estate plan as needed to protect your heirs and family from the burden of unexpected estate taxes.

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E-mail, blog, iTunes, social networking, online photo albums… more and more of our lives and our businesses are moving online, but what happens to that online life when you pass away? Will your accounts languish, becoming an easy mark for hackers? Eventually be deleted? Perhaps they’ll be passed to your spouse after petitioning the court for access, but will your spouse know what to do with all of them?

The internet is no longer merely where you go for personal e-mail and the occasional online shopping trip—many businesses now exist almost exclusively online, as do reputations and friendships. What tech-savvy people need is a way to dispose of all of their online assets when they pass away, an online will, if you will. Now there is a company that offers this kind of service: Legacy Locker.

Legacy Locker describes itself as “a safe, secure repository for your digital property that lets you grant access to online assets for friends and loved ones in the event of death or disability.” It allows you to upload login information for all of your various online assets and assign those assets to different friends, loved ones, or trusted agents. Upon your death, Legacy Locker will send the ownership information, along with your own final letter or instructions, to the people you have “nominated”. This means you can assign assets to the appropriate people: your personal e-mail to your spouse, your iTunes account to your daughter, your business e-mail and blog to your business partner.

Of course there are drawbacks; the Legacy Locker needs to live as long as you do to be effective, and you’ll need assurances that it is safe and “hack-free”, but this is obviously an idea whose time has come, because our online lives are becoming as rich as our physical lives, and will soon (if not already) need just as much protection.

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There are many estate planning techniques available to a family that wants to protect assets to pass on to the children or grandchildren; options that extend far beyond a simple will, and even beyond a basic living trust. Two of these effective but lesser-known techniques are the Grantor Retained Annuity Trust (GRAT) and the Family Limited Partnership (FLP). Although both of these are trusted and respected protection strategies among estate planning attorneys, the White House is hoping (if Congress agrees) to place restrictions on the extent to which the GRAT and FLP can protect an estate from being taxed.

The proposed restrictions seem relatively minor, but could have a significant financial impact, as this article in the Wall Street Journal explains, including a proposed “minimum term of 10 years for GRATs,” allowing assets to then convert back to the grantor’s estate and be subject to estate tax; and the proposed restriction to FLPs which “aims to limit the ability of wealthy families to use partnership structures to minimize the valuation of assets for estate-tax purposes.”

What does this mean for our readers? If you have assets that you expect to pass on to your heirs come in and see us right away. We can plan now to limit the impact these restrictions would have on your family and your assets if and when they are passed into law.

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A child paralyzed in a tragic accident; a spouse diagnosed with Parkinson’s disease and then placed in assisted living after a terrible fall; mounting medical bills. How does one plan for a situation such as this? Kate Michelman certainly thought she and her husband had planned for every eventuality—she is a well-known and well-to-do public figure, they have excellent medical insurance, long-term care insurance—and yet still they found themselves “on the brink of losing everything”.

Michelman’s story is frightening precisely because it could happen (and is happening) to any of us. The unfortunate truth about medical insurance, long-term care insurance, and even Medicaid is that it often covers “most of the cost” of medical treatment—but “most” is woefully lacking when faced with the reality of the high cost of medical care.

And so we ask again, how does one plan for a situation such as this? The answer begins “with help”. The medical industry, insurance industry, and government benefits programs are staggeringly convoluted and confusing. Enlist help in navigating their requirements and regulations. Find a professional who can help you build a plan to make the best use of those systems and what they offer. Find other professionals who are well-versed in peripheral systems who can support that plan.

Medical care in the United States has become a mountain of cost, and even the young and healthy cannot afford to ignore it any longer.

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The Wall Street Journal says that family limited partnerships are finding renewed favor as an estate planning tool, thanks to recent tax-court decisions.

In an article entitled “Covering Your Assets” Journal writer Mark Klimek asserts that despite some IRS opposition, tax court rulings in recent years have endorsed the use of FLPs when they are used to preserve a family business for future generations.

“Setting up such a partnership could be especially useful right now for families with businesses,” according to the article. “The Obama budget calls for the estate tax to be restored next year at a rate of 45 percent for estates worth more than $3.5 million, or $7 million for couples. Income-tax increases for high earners are on the agenda as well.”

The article goes on to describe many of the dos and don’ts of FLPs, but of course each family’s situation is special, and you should consult an estate planning attorney before making decisions about any specific strategy.

In any case, the time to act is now. According to one expert quoted in the Journal article, “There’s a realization that any kind of estate planning you can do this year is good, because 2009 will probably end up being the most favorable year for taxes ever.”

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When we talk to clients about “the estate” they will pass on to their heirs, that estate includes a number of components: home, life insurance, bank accounts, investment accounts, secondary properties, and IRAs or other retirement assets. Many people consider their IRA the least of the assets in their estate, because they intend to spend down the IRA before they die, leaving nothing (or almost nothing) to pass on to heirs. But should you die before that IRA is spent down it can end up being a significant inheritance over time, provided you—and your heirs—play your cards right.

According to this article by Dan Caplinger, one of the biggest mistakes you can make is to not designate a beneficiary for your IRA, “based on how the tax laws treat IRA money that goes through your estate, your heirs may miss out on a tax break that could save them thousands of dollars over their lifetimes.” Caplinger’s article continues to explain what he thinks is the best way to designate a beneficiary for your IRA, and how the beneficiaries can spread out distributions over time to make the most out of their inherited investment.

Of course, at our firm we know that every situation is unique, and there may be times when perhaps it will be more beneficial to your purpose to distribute your IRA to your heirs through your trust. We always recommend asking your trusted estate planner, financial advisor, or both before making changes that will affect the distribution of any part of your estate.

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Most Americans have become aware of the benefits of financial planners, and of having a financial plan of their own. And now with the recent Wall Street crisis, public talk about financial plans and goals (and how yours may be weathering the storm) has become a lot more common. With all of this, it may seem that “financial planners” have been around forever. But according to Forbes.com, the financial planning profession has actually only been in existence for 40 years or less, and the idea of a “financial plan” is still a lot more nebulous and diverse than you may think.

What this means is that if you were thinking to hire a financial planner so you could promptly hand over that mysterious and confusing responsibility, you’ll have to think again. You may have to be a lot more educated and involved in choosing your financial planner than you had hoped. A financial plan is not a “one-size fits all” commodity. Not even close. Mike Patton has titled his article “The Elusive Financial Plan”, and says “If you were to stop 10 people in the street and ask them, ‘what is a financial plan?’ you’d likely get 10 different answers.”

If you are not financially savvy you may be starting to worry just about now. How can you possibly be expected to know which of those 10 different plans (or which of 10 different planners) may be right for you? Luckily, you don’t have to decide alone. The best way to find a good match is to consult with friends who have financial goals and values similar to your own. Another option is to ask other trusted advisors for recommendations. Estate Planners work closely with many different financial planners and firms, and will be more than happy to help you find a good fit. An added benefit to asking your attorney is that the best estate plan to have is one that has the input of all of your advisors. The better the relationship between your financial and estate planner, the better your plan will be.

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