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Ned almost lost the farm that
had been in his family for 8 generations! We’ve all heard
that ‘The Devil is in the details.’ It is especially true
when it comes to estate planning. Make sure you don’t make
the same mistake Ned did.
Ned and Nellie Mae were in their early 80’s. Even though
they had been happily married for over 30 years, they each
had children from a previous marriage. About 10 years ago
they became concerned about the amount of estate taxes that
would be due on the family farm when they died. They’d heard
the nightmare stories about losing the farm to Uncle Sam and
they wanted to make sure it wouldn’t happen to them!
So Ned went to see his local attorney. He told the attorney
about their estate tax concerns and also that he wanted to
make sure the farm went to his children—stayed in his
family—instead of going to his stepchildren when he died.
Well, the attorney told Ned what to do and, obediently, Ned
and Nellie Mae implemented that plan over the next 9 years.
That’s when I got involved. The attorney’s advice sounded
good, but the Devil is in the details! And the attorney
missed a few details that left Ned holding the bag.
The result was that if Ned had passed away, his share of the
farm could have gone to his stepchildren instead of his
daughters—the very thing he was trying to prevent!
The attorney’s plan was also supposed to reduce the amount
of estate taxes that would have to be paid, but because the
attorney missed one small detail it would be as if the plan
had never happened, leaving a $750,000 tax bill! They
followed a plan for 9 years and were right back where they
started!
Fortunately, I was able to help Ned and Nellie Mae get the
chaos that had become their estate plan quickly and easily
sorted out. With the help of a competent attorney, Ned and
Nellie Mae now have the peace of mind that what they want to
happen, will happen.
Their estate taxes have been drastically reduced, possibly
even eliminated. Just as important, Nellie Mae’s children
will get her portion of the estate and Ned’s children his.
The farm that has been in his family for 8 generations will
stay that way for a few generations more.
To their credit, Ned and Nellie Mae did everything they were
supposed to. They were proactive in recognizing that they
needed to take action to reduce their estate taxes. They
knew they needed legal documents in place to dispose of
their estate according to their wishes, minimizing any
conflict between the children.
They sought out an attorney to help them. They followed the
attorney’s advice and did what they were supposed to. So
what went wrong and how can you avoid making the same
mistake?
The only mistake Ned and Nellie Mae made was not working
with an attorney that specialized in handling complex
estates. Their attorney was a generalist. Being in a small
town he did a little bit of everything, legally speaking.
Just like in medicine, it is hard for any attorney to be an
expert in all areas of the law. You may have a family
doctor, but if you need a heart transplant they will refer
you to a cardiac specialist. If you have severe foot
problems they will refer you to a podiatrist. If you have
hemorrhoids… well, never mind, you get the picture!
Ned and Nellie Mae’s attorney knew in general what they
should do, but since he wasn’t an expert in the area of
estate planning he missed a crucial detail.
It’s the same way when it comes to handling all of your
financial affairs. For all but the simplest cases, you
should be working with someone who specializes in the areas
you need help. For instance, I specialize in Estate
Planning, Insurance and Investments for affluent seniors,
retirees and near-retirees. Others specialize in company
retirement programs, etc. Work with a competent professional
that specializes in your situation.
Don’t be left holding the bag! Go to
www.guardingyourwealth.com. While there, be sure to tell us
your story. Maybe others can keep from making the same
mistakes.
Mr. Voudrie is a Certified Financial Planner and President
of Legacy Planning Group, Inc., a Private Wealth Management
Firm in Johnson City, TN. He can be reached toll-free at
1-877-827-1463 or at jeff@guardingyourwealth.com..
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