Perhaps the term "estate planning" is why some believe it's not for them. The phrase may bring up visions of Gold Coast mansions and billionaires shielding their wealth from the grasp of Uncle Sam.
"Estate planning is not only about taxes, and it doesn't only apply to the Vanderbilts," says Martin Shenkman, a New Jersey-based author, lawyer and CPA. Shenkman says that taxes and asset distribution are just two parts of an estate plan, although they often overshadow other components. "It's tragic, because the human element is what planning is supposed to be about."
Shenkman says an estate plan should tackle religious, ethical and health-related issues. He says that while 120 million Americans live with a chronic illness, most plans do not include information about how to provide for a family member with special health needs. The issue is especially personal for Shenkman: His wife, Patti, was diagnosed with multiple sclerosis five years ago.
Shenkman's latest book, "Estate Planning After the Tax Relief and Job Creation Act of 2010," is part of an interactive CD-ROM published by the American Institute for Certified Public Accountants. The product is aimed at professionals who draw up estate plans. He and co-author Stephen Akers are donating all royalties to various charities.
As for money issues, Shenkman points out that while there may be a will, there's no way it will trump beneficiaries you designated when you took out a life insurance policy or opened savings accounts, IRAs and in many cases brokerage accounts. "Do you know who does the most estate planning in the whole country?" Shenkman says. "Everyone thinks it's lawyers, but it's actually bank tellers." He advises everybody to check the beneficiary designations on their accounts to make sure they are not outdated.
Shenkman urges those who prepare estate plans to go beyond the legal lingo and think compassionately. For example, he tells of the case where after a mother died, her daughter was shocked that most assets went to her brother. Shenkman says the lawyer should have pushed the mother to include an explanation, even something as simple as "Your brother needs it more."
The daughter "is going to walk around for the rest of her life feeling 'Mom didn't love me,' " Shenkman says. "One sentence would have saved a life sentence of pain."