Frequently Asked Questions and Answers Regarding Estate Planning:

1. What is an estate plan?

An estate plan has several elements. They should include, at minimum: a will; a power of attorney over assets; and a living will and healthcare proxy (medical power of attorney). For many people, a trust may also make sense. When putting together a plan, you must be mindful of both federal and state laws governing estates, as well as your goals. For example: Do you have minor children? Are you concerned that in the future you may have health problems? Has your family situation changed, such as having a child, becoming divorced, or becoming remarried?

2. Why should one have an estate plan?

No matter your net worth, it's important to have a basic estate plan in place. Such a plan ensures that your family and financial goals are met after you die.

A will tells the world exactly where you want your assets distributed when you die. It’s also the best place to name guardians for your children. Dying without a will, also known as dying “intestate,” can be costly to your heirs and leaves you no say over who gets your assets.

Trusts are not just for “rich people.” They allow you put conditions on how and when your assets will be distributed upon your death. They also allow you to reduce your estate and gift taxes and to distribute assets to your heirs without the cost, delay, and potential publicity of probate court, where all cases end up when there is not a trust. Some also offer greater protection of your assets from creditors and lawsuits, or you children’s creditors and lawsuits. Also, you can distribute money or assets over time to your heirs.

Trusts also greatly assist you and your loved ones should you become disabled, sick, or unable to make decisions for yourself. It will help you avoid expensive court proceedings, and allow your loved ones to help you with the least burden possible.

3. What is the federal estate tax exemption?

The federal estate tax exemption (the amount you may leave to heirs free of federal tax) has been rising gradually and hit $3.5 million in 2009. The estate tax is scheduled to phase out completely by 2010, but only for a year. Unless Congress passes new laws between now and then, the tax will be reinstated in 2011 and you will only be allowed to leave your heirs $1 million tax-free at that time.

4. Where does one start?

Taking inventory of your assets and your wishes is a good place to start. Your assets include your investments, retirement savings, insurance policies, and real estate or business interests - basically everything you own.

5. Should one have an attorney prepare their estate plan or do it themselves by purchasing an on-line, fill in the blank kit?

Estate planning laws, tax laws and probate laws are very, very technical so it is best to have an attorney who looks out for your best interests. Employees of a document preparation business may not know the laws, and even if they do, they are not allowed provide legal advice. An instruction manual from an online kit will not adequately advise or protect you either. There are many complex issues that need to be evaluated. For example, are your assets community or separate property, or both? What is the best way to make sure your children from a prior marriage receive the assets you want them to have? How should you address potential capital gains as they relate to your estate plan? These are just some of the issues an attorney can address with you.

You may save a small amount of money at the time, but you could lose a lot if your documents are invalid or do not adequately reflect your wishes. It's imperative that you have an attorney look over all of your documents and make sure that they comply with current laws. It’s also a good idea to have your estate plan reviewed by an attorney annually, and if not every year, then at least during every life changing event (births, deaths, marriages, etc.).

6. Why Chapman Law Firm, P.C.?

Chapman Law Firm has Attorneys both in Reno and Las Vegas who are competent and ready to handle your estate planning needs. We will hold a free initial client conference so that the Attorney may meet with you personally to discuss your wishes. After developing an understanding of your estate planning goals and objectives, we develop the estate planning strategies that we feel would best achieve those goals and objectives. Chapman Law Firm understands that estate planning is a very personal matter. Thus, the firm provides knowledgeable and friendly Attorneys and Paralegals along with a friendly and personal staff dedicated to providing professional attention to your case.

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Any advice contained in this information cannot be used by anyone to avoid tax penalties, or for promoting, making, or recommending to another party any transaction or matter addressed herein (See IRS Circular 230).