ISSUE #4
Getting Legal Advice

In order to properly plan your affairs, you will need to visit with an attorney for legal advice and documents. Here are some tips for finding and working with a lawyer:

1. Referrals— Just as you would do when hiring any other professional, ask your friends and your current advisors to recommend a lawyer. It is very helpful to hear from someone you know and trust that they have had a good experience with a particular lawyer. Your accountant, banker, stockbroker, financial planner or insurance agent may also be a good source of referrals.

2. Your Local Bar Association — Most local bar associations operate lawyer referral programs that will match you with attorneys by specialty and geographical area. Most bar associations will refer only lawyers who meet minimum requirements for experience. If you are unable to obtain any personal referrals, this is a good place to start. You can obtain access to the lawyer referral program by calling your local bar association or by visiting this internet site: http://www.abanet.org/legalservices/lris/directory.html

3. Screening — Before you schedule an appointment, verify that the lawyer practices in the area you need. For most seniors who are putting their affairs in order, a lawyer who specializes in estate planning and/or eldercare law will usually be most helpful. While most lawyers write Wills, it is often best to work with one who specializes in this field. Ask the lawyer how much time he or she spends working on estate planning and elderlaw. Also ask if the lawyer is board-certified in either of these areas. While certification is not essential, it does indicate a high level of commitment to this area of practice.

4. Fees — Lawyers charge fees in a variety of ways. For estate planning and elderlaw, lawyers usually charge an hourly rate or a fixed price. Make sure you understand the fees before you begin to work with an attorney. Many lawyers will offer an initial free consultation, but some do not. Lawyers generally do not advertise their fees, so you have to call them to learn what they are.

Fees for estate planning and elderlaw services can vary widely. Higher fees do not necessarily mean better service. You may be pleasantly surprised at how reasonable the fees are for basic estate planning.

5. The Relationship — Make sure you are comfortable with the lawyer you select. For many people, this means a lawyer who will patiently answer your questions in plain English, making sure you fully understand your options. It also means a lawyer who will take the time to fully listen to you and understand your goals.

Remember, you are entrusting your final affairs to the lawyer you select, so be sure you make a good decision. Bring your closest relative along, if possible, to your first appointment, so one of your heirs will know your lawyer.

6. Legal Aid Services — Legal aid societies provide free legal services to people who truly cannot afford to pay a lawyer. There are legal aid societies in most communities that assist these people by matching them with lawyers who donate some of their time. They must meet low-income eligibility requirements to use this service. The American Bar Association offers a national directory of legal aid societies on its internet website:

http://www.abanet.org/legalservices/probono/directory.html#

7. Lawyer Substitutes — Avoid risky short-cuts. You are taking a huge risk if you rely on blank legal forms or software programs that produce legal documents. While this approach may give you very low-cost documents, you have deprived yourself of the most valuable benefit of working a lawyer, which is receiving legal advice. Your modest investment today in a professionally-developed estate plan may avoid huge expenses for your heirs in the future.

This publication has been prepared as an educational resource to help the reader identify areas of potential concern. The publisher is not engaged in rendering legal, accounting or other professional services. The information contained in this publication should not be acted upon without first obtaining the advice of a professional advisor. 2004 © Florida Philanthropic Advisors, LLC. Material may not be used without permission.

Estate Planning Quiz

Try this little true/false quiz to check your knowledge of gift and estate planning.

1. T/F If you die without a valid will, your entire estate goes to the government.

2. T/F If, during the year, you make a gift of $_____ to a non-relative, you must inform the IRS by completing and submitting a gift tax form.

3. T/F The maximum you can transfer to your spouse at death, without incurring an estate tax on the transfer, is $_____.

4. T/F If you itemize your deductions, you can claim an income tax charitable deduction for the entire amount of an outright gift of cash to charity, as long as the deduction does not exceed your taxable income for that year.

Did you answer "true" for any of the questions? If so, you're not alone. Lots of people have never taken the time to understand how gift and estate planning works . . . and the pay-off a little planning can produce.

Here are the answers:

1. False. If you die without a valid will, the state where you lived has a prescribed formula for the disposition of your estate. While your assets do not automatically flow to the government, you may find that the state's plan is not at all what you would want. And the people the state selects to settle your affairs (and perhaps serve as guardians to minor children) may be total strangers. And, certainly, the state would not allocate a portion of your assets for ABC. One of the finest things you can do for yourself and your loved ones is to contact an estate planning attorney to have a will written or to review a current will that may be out-of-date.

2. False. Each year every person is entitled to receive what is called the "annual gift tax exclusion." This means any person may give to any other person, other than a spouse, a maxi-mum of $_____ without having to report the gift to the IRS. Many parents use this exclusion to pass assets to their children on an annual basis. This permits them to keep their estates smaller and thus avoid possible estate taxes when they die. This also allows them to see how their children handle inherited money.

3. False. The "unlimited marital deduction" lets any U.S. citizen transfer to his or her U.S. citizen spouse as much as desired -- during life and at death. For example, a husband could give his wife a billion dollars and not incur one dime of gift or estate tax. However, when one spouse dies, the remaining spouse is left to face what may be an enormous estate tax problem. Careful planning while both spouses are alive can dramatically affect possible future tax consequences -- especially if the estate is more than $_____.

4. False. Assuming you itemize your deductions, you can only claim a charitable income tax deduction for cash gifts to a qualified charity up to 50 percent of your adjusted gross income (AGI). For gifts of appreciated property, the deduction ceiling drops to 30 percent of your AGI. However, if you are unable to use all of your charitable deduction in the year of the gift (whether cash or appreciated assets) you have five more years to exhaust it.

These are only a few of the interesting and important items you need to know. Our planned giving director is ready to provide additional information to you and to meet with you and your advisors if you desire. By the way, we always urge our friends to consult with their own qualified advisors to obtain authoritative information before making decisions regarding their estates.

If you have any questions, you can reach Mr. Ditlevson by calling (419-289-5090) or by email pditlevs@ashland.edu or regular mail ( 401 College Avenue, Ashland, OH 44805).