Estate planning is like planning for any occasion or emergency situation and requires the right balance of openness, communication, and preparedness. Maryland residents who wish to begin the estate planning process or are in the process already may find that there are a few factors which can darken the waters of the estate administration process. Among the most common factors are taxes, economics and humans. That’s right; humans are among the challenges in estate planning.
Estate administration would be much easier if emotions such as jealousy, greed and other completely human factors were not a concern. If these factors are ignored, additional problems may arise throughout the process. Estate planning issues when family businesses are involved may be even more complicated by these factors.
Beginning the process with a simple statement of the facts, circumstances and guidelines can be a tremendous help. Outlining capitalization and creating an intentionally defective trust (IDT) may be two ways to ensure that the business is secure and that these important financial considerations are included. It is also important to outline voting rights and how much the children are involved in the business, as well as considering asset division among children who are not involved.
Estate planning and estate administration do not have to be a challenge for Maryland residents. With some careful planning, a bit of patience, and a heap of communication with the right supportive parties, an individual can rest assured that their assets and businesses are adequately protected. While human emotions cannot be planned for, financial and tax implications in estate planning often can be.
Source: Modern Machine Shop, “How to Solve Common Estate-Planning Problems,” Irving L. Blackman, June 20, 2012