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Estate planning must account for many different details

People in Polk County who have thriving careers and substantial assets may think about planning for retirement in the future. Likewise, these people might also want to set up a plan to ensure that their family members are in good financial shape when the person passes away, or even if they become incapacitated and can no longer work or care for their financial affairs. Estate planning can achieve these goals and more, but a good estate plan must account for many different possibilities.

When an estate plan fails to account for some key piece of information in the person's life, it could result in unintended consequences in the future. The Wall Street Journal reported an interesting story along these lines about a doctor who had built a successful private practice. The doctor had begun the estate planning process by drafting a will and establishing a trust for his wife and children. However, the doctor had one major flaw in his estate plan.

In the event of the doctor's death, his estate left his medical practice to his wife. The problem with that was that laws prohibit anyone who does not have a medical license from owning a medical practice. Therefore, the man's wife would have to liquidate the practice as quickly as possible if the doctor suddenly passed away. Under that scenario, the wife would probably not be able to sell the practice for near its fair value because any potential bidders would understand the wife's predicament and likely submit a low bid price.

Like this situation shows, a thorough and comprehensive estate plan must address many different kinds of issues. It is possible to put together a plan that employs strategies to preserve one's assets and their value following certain life-changing events.

A good estate plan doesn't just address asset distribution after someone's death, it also takes into account all of the needs and circumstances of the particular person's estate.

Source: Wall Street Journal, "Fixing a Doctor's Faulty Estate Plan," Alex Coppola, May 27, 2015

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