We talk to a lot of people about estate planning. It’s our job. :)

And a lot of those conversations involve people interested in eliminating all estate taxes they might owe.

And that’s a great goal.

Unless you don’t have a plan at all.

Then it’s a terrible goal.

Most people don’t believe me over the phone. They don’t have enough time to consider the consequences of failing to take care of the main thing first.

So I thought I’d talk about it here.

The first thing I did when thinking about the sequencing of estate planning, I thought about the order in which priorities should be addressed.

Here’s what I came up with:

1. Organization;
2. Putting the right people in the right place;
3. Distributions;
4. Control;
5. Estate taxes;

Do you disagree with this list?

That’s okay, because 1-4 are interchangeable.

They all get done at the same time – when you create your foundational plan.

If you skip to number 5, here’s what generally happens.

First, you start out hot – you’re interested, you’re excited, and you want to save money.

Second, we start working on your plan – and asking you a bunch of questions you’re not sure how to answer (because there are a lot of unknown variables and tax planning usually includes giving up control of your assets).

Third, you procrastinate because you’re not sure what to do and there are plenty of distractions in life.

Fourth, you end up doing nothing, something happens, and your family is burdened with figuring out with an unorganized estate (i.e. they have no idea where accounts are, etc.), figuring out who should be in charge (there’s almost always the obvious choice and then the person that really wants to do it even though it’s going to be a trainwreck), distributing your assets to the people the government think are most entitled to them, and, if you have young kids, giving them not just a lot of assets, but also zero direction on how to use them and zero oversight or help to guide them along the way.

Estate taxes are easier to take care of than you think.

But it takes longer than you think (it’s a process that builds upon itself – there’s usually not a singular solution).

And before you can get to the complex stuff you should take care of the foundational stuff.

It’s like I tell everyone when we have this conversation – the foundational stuff (power of attorney, medical power of attorney, will, revocable trust, etc.) is like your house.

If you had a piece of land you’d always want to build the house first.

You wouldn’t build the pool and then put the house in.

You wouldn’t put up the barn and then the house.

First, house.

When the time is right, pool.

A little later, the barn.

I know estate taxes matter.

And we want to help you eliminate them.

And there’s a reason you come to us for advice.

On this one particular specific issue, we’re REALLY really good.

Hope your 2024 is off to a great start!

Cheers,

Christopher Small
CMS Law Firm LLC

PS – don’t keep this estate planning stuff to yourself – you know it’s important and we LOVE referrals!