Estate planning Featured

8:00pm EDT August 26, 2007

Fortunately, many people have realized the importance of estate planning, and it has become an essential part of their financial plans. Do you count yourself among them? To be sure, legal and financial issues can seem complex, but the purpose of estate planning couldn’t be simpler: to empower you to decide how best to distribute your assets at your death by preserving these assets through minimized estate taxes and other expenses associated with inheritance.

Smart Business talked to Curt Ramkissoon, vice president, private banking, Columbus, for FirstMerit Bank, about the importance of sound estate planning.

What is an estate plan?

An estate plan is really a process that provides for the management and disposition of your assets if you die or if you become physically incapacitated. It involves your family, including minor children, other individuals and, in many cases, charitable organizations. The centerpiece of an estate plan typically involves a will and, more commonly, a revocable living trust.

What is an estate?

An ‘estate’ consists of all the properties owned by you, which may include:


  • any type of real estate;



  • bank accounts — checking, CDs, savings and money markets accounts;



  • stocks, bonds and other marketable securities;



  • life insurance policies; and



  • personal property, such as automobiles, jewelry, artwork and other valuable collections.


What does an estate plan accomplish?

Your estate plan will help you save, or better yet, maybe even avoid taxes, including gift and estate taxes, income taxes, and other taxes that may apply to your estate. It is also an excellent way to help you plan for temporary or long-term incapacity through the use of trusts or powers of attorney, including powers of attorney for health care. This is not to mention helping you plan for your retirement years by planning distributions from qualified plans such as 401(k), 403(b) and IRA plans.

What happens to my assets if I don't have an estate plan?

If you do not have an estate plan, you cannot control how your assets will be managed or distributed if you die or become incapacitated. Your estate could be distributed to your heirs at law or other default beneficiaries if you die without a will. Also, if you die without an estate plan, your family may be faced with very substantial taxes that could have been avoided with simple planning.

My estate plan is simple. Can't I just get a will?

In some cases, a simple will may be enough, but often, it is not. Many common assets, such as joint assets, survivorship marital property, life insurance proceeds and IRA proceeds are not governed by a will. It is important to consider the financial impact assets not governed by your will, will have on your survivors. For many, an estate plan is not as simple as you might expect.

Other estate-planning documents, such as trusts, are available to help reduce or eliminate estate taxes. However, trusts are also available to address special family situations, such as special needs children, spend-thrift children, second marriages, etc. You may just have the desire to control the distribution of your assets well beyond your children, i.e. grandchildren, great-grandchildren, charitable entities, etc.

How often would you recommend that an estate plan be reviewed?

At the minimum, an estate plan should be reviewed every three to five years. However, if there is a life-changing event — such as a marriage, the death of a spouse, the birth of a child or grandchild — then it should be reviewed earlier. Also, it should be reviewed if the needs of a child or beneficiary have changed.

How important is it to get expert advice with your estate-planning needs?

It is very important to choose an expert that specializes in the estate-planning field. An estate-planning professional can offer expert advice and assist you in creating a customized plan specific to a family situation.

CURT RAMKISSOON is vice president, private banking, Columbus, with FirstMerit Bank. Reach him at (614) 570-7570 or