What is an estate plan and how do I create one?

Mr. Roskoph: An estate plan is designed to coordinate ownership of assets, beneficiary designations, and ultimate recipients through a will or living trust. Gathering your data for your estate planning attorney and discussing your objectives with that person will initiate the process. The actual plan developed will result from the questions posed by the planner and your responses. The combination of these factors will lead to a satisfactory plan for tax and disposition purposes.

Ms. Dodd: The first step to creating an estate plan is to find a competent estate-planning attorney. He or she will be able to guide you through the process, which typically starts with an analysis of your estate planning goals and your current assets. Once you have determined your goals, your attorney will draft the legal documents that will implement your estate plan. These may include a will, living trust, durable power of attorney for asset management and durable power of attorney for health care.

If I don't have a lot of assets, do I still need a will?

Mr. Roskoph: Yes! The state law provides for the disposition of assets regardless of the amount. That plan may be quite distant from your desires. There are crucial decisions, such as guardianship of minor children, that should be resolved in the will.

Ms. Dodd: You need an estate plan whenever you want to leave assets to your heirs or others in ways that differ from the state statute. For example, if you die and leave a surviving spouse but no children or grandchildren, your surviving spouse will receive one-half your separate property and your parents (or your brothers and sisters if your parents predeceased you) will receive the remaining half of your separate property. Since most people prefer to leave all of their property to care for a surviving spouse (often in trust), the intestacy scheme [imposed by the state when the deceased has left no will or trust] will not implement their wishes. Further, you need an estate plan to name a fiduciary [one who manages assets of the estate] of your choice to administer your estate.

How do I leave my estate to the causes I care about?

Mr. Roskoph: Discuss your desires with an experienced estate planner and the organization supporting your causes so that you can develop a tax-efficient method to accommodate your wishes. Lifetime transfers through planned gifts may also provide income tax benefits to you.

Ms. Dodd: There are many forms that charitable gifts can take during life and at death. For example, you may make gifts during life or through your estate to your favorite charities, to a donor-advised fund, to a supporting organization or to a charitable remainder trust. The optimal use of these charitable vehicles depends on your own financial and familial situation.

Do I need a living trust?

Mr. Roskoph: A living trust does not save taxes more than a well-drafted Will, but it does avoid probate, the publicity of a public forum, the statutory costs, publication (newspaper) costs, and filing fees. Anyone desiring to implement good tax planning and probate avoidance should consider a living trust.

Ms. Dodd: By avoiding probate, the successor trustee of your living trust may distribute your assets quickly and efficiently to your intended heirs, whether outright or in trust. There is no need to obtain prior court approval and the procedure is completely private. However, you also do not get the benefit of court supervision of the disposition of your assets at your death. Thus, it is essential that you select a successor trustee you can depend upon to distribute your assets according to the terms of your living trust. Also, if you become incapacitated, a living trust will provide for a successor trustee to take charge of your assets without the expense and delay involved in obtaining a court-ordered conservatorship.

How much does it cost to have an attorney write my will (or living trust)?

Mr. Roskoph: This will depend upon the thoroughness of the attorney, the attorney's experience, and the personal attention given to you. Attorneys generally charge by the hour. The total cost can be minimal compared to the tax savings and administrative costs of will disputes.

Ms. Dodd: It is difficult to estimate the cost of the typical basic estate-planning package. Costs range widely depending upon the attorney you select, the complexity of your estate plan and whether you implement a sophisticated lifetime gifting program for your heirs and/or for charities. Some portion of the costs may be deductible on your individual income tax return.

If my spouse has a will, do I need one too?

Mr. Roskoph: Absolutely! Your assets are not controlled by your spouse's will and a plan should be coordinated. (But note that you do not have to dispose of your assets in the same manner as your spouse).

Ms. Dodd: A living trust, however, is usually a joint document executed by both you and your spouse and can include provisions for both your community property and any separate property either or both of you may own.

Practicing attorneys Paul Roskoph of Roskoph Associates and Jill Dodd of Steefel Levitt & Weiss both volunteer as members of the Legal and Tax Professional Subcommittee of The Jewish Community Endowment Fund, and Mr. Roskoph serves as the chair of the JCEF Peninsula Professional Subcommittee.

Each individual's tax and estate planning needs are unique. Neither the authors nor the Jewish Community Federation or Jewish Community Endowment Fund is engaged in rendering specific tax or legal advisory services for your unique circumstance. For advice and assistance in specific situations, the services of an attorney or other professional advisor should be sought.