Answering Your Estate Planning Questions

If you have estate planning questions, ask your estate planning attorney.  Your questions are welcomed.  These are the kind of questions we hear in our office.

Do I need life insurance?

If you fit into any of the following 6 categories, you likely need life insurance:

• Your loved ones depend on your income
• You own a business with one or more other people
• You wish to create an estate
• You wish to equalize an estate
• You wish provide an inheritance to a child who is not in the family business
• Your estate is subject to federal estate taxes

My mother has dementia, can she sign a will?

Perhaps.  Adults are presumed to have the requisite legal capacity to execute a will and other legal documents.  Even if your mom has dementia, she can execute a will if she has capacity at the signing.

The requirements for testamentary capacity are:

• An understanding of the size and content of one’s estate
• The natural beneficiaries of one’s bounty
• The effect of the document being executed (i.e. how assets will be distributed)

What’s a Crummey power?

A Crummey power is used to make a gift a “present” gift (as opposed to a future gift) so that it qualifies for the annual gift tax exclusion or the lifetime unified credit exemption.

In practice, a letter is sent to beneficiaries, indicating that they have the present right (i.e. 30 days) to take the gift (i.e. cash) out of a life insurance trust if they’d like.  If the gift is not removed, it is commonly used to purchase life insurance.

If you have additional questions, consult with an estate planning attorney.  Before any estate planning meeting, jot down your questions so you don’t forget to ask them.  We’ve also found it helpful for our clients to jot down the answers to questions so that they can refer back to the information at their leisure.