Editorial
Front Page - Friday, January 21, 2011
Attorney urges considering estate planning issues in advance
David Laprad
Attorney Norman Sabin provides estate and tax planning services to individuals and businesses. He says Realtors have two good reasons to get in touch with an estate planning attorney: one is related to their service to their clients, while the other has to do with the legacy they want to leave behind.
- David Laprad
Attorney Norman Sabin says Realtors have two good reasons to get in touch with an estate planning attorney. One is related to their service to their clients; the other has to do with the legacy they want to leave behind for their family.
“Realtors should be aware of certain things related to property transfers. The more information and assistance they can provide their client, the more satisfied their client will be,” Sabin says.
Sabin says when a Realtor is working with a client who’s transferring property within his or her family, he or she should be aware of the gift tax issues that come into play and be ready to refer his or her client to an estate planning attorney.
“There are ways of transferring properties through a trust as opposed to giving it to someone outright that might be more advantageous. For example, you can freeze the estate by putting it into a Guarantor Retained Annuity Trust. Property is typically an appreciable asset, and if you put a piece of property into a GRAT, it takes it out of the grantor’s estate for the benefit of the recipient, and any appreciation on that property won’t be counted against the grantor for purposes of estate tax,” Sabin says.
While Realtors know to tread carefully when doling out advice, it can be a boon to a client to have an agent who’s aware of this and other issues related to property transfer and has an attorney on tap who’s licensed to provide the information that can save the client money. This in turn can boost an agent’s reputation as a knowledgeable and helpful professional, Sabin says.
“All that might be needed is a quick phone call, but at least the agent has covered all of his bases and provided enhanced service to his client,” he says.
The other reason Realtors should get in touch with an estate planning attorney is the same reason every person should: to make sure their estate goes where they want it to go. If agents fail to do this while they’re able, the state will end up dictating what happens to their estate, and no one wants that, Sabin says.
“The number one myth of estate planning is ‘I don’t have a large estate, so I don’t need to worry about putting a plan in place.’ Nothing could be farther from the truth,” he says.
Some of the reasons people should get their affairs in order are unrelated to the assets they own, Sabin says. For example, an estate planning attorney can make sure a client has made provisions for his or her minor children. Again, if this is not done while the parent is alive, the state will make that decision for them.
“You can dictate through your will who you want to take care of your minor children. If you don’t have a will, you’re allowing the state to dictate who their guardians will be,” Sabin says.
An estate planning attorney can also help a Realtor provide for his or her children in the most effective way. For instance, parents often bequeath their estate to their children in their will; however, their kids might not be capable of handling a large cash outlay, Sabin says. Through a trust, a grantor can make arrangements ahead of time for the estate to be managed on behalf of the son or daughter.
“If Johnny is a spendthrift or has substance abuse or gambling problems, you can do an asset protection trust. This allows you to protect your assets with even more ironclad language; your assets won’t be arbitrarily given to Johnny, but distributed for his benefit,” Sabin says.
Sabin says an estate planning attorney can also help a Realtor set up a revocable living trust.
“Statistics say 70 percent of us are going to suffer some form of disability before our death. When we think of what we’re going to do with our estate, we tend to think in terms of what’s going to happen to it when we die. But wills don’t go into effect when a person is disabled.
“So estate planning attorneys recommend you have an estate plan prepared which includes a power of attorney naming someone who can act in your stead when it comes to your health care, property and so on. If you don’t have those things in place, the only recourse is conservatorship, which involves court proceedings, expenses, time and humiliation.
“With a revocable living trust, you’re able to address those issues yourself. You can specify someone to step in as your successor trustee, and they can take over your affairs,” Sabin says.
Sabin believes people have more than physical assets to pass on to their children, so he takes estate planning a step farther to include the intangible things, such as spiritual beliefs, values and life stories.
“Our clients complete a workbook that allows them to lay out their biography and share the things they’d like their kids to learn without going to the school of hard knocks. It allows you to pass on your wisdom so your children can avoid the things you went through,” Sabin says.
While assets are important, the most valuable thing a Realtor can pass on to his or her children is a cohesive, unified family, and that’s the biggest benefit of an estate plan, Sabin says.
“If you don’t put together an estate plan, you’re risking fracturing your family. Part of your legacy needs to be taking care of your children in a way that doesn’t create fractures. You don’t have to be wealthy to do that,” Sabin says.
Sabin is an attorney in private practice in Chattanooga. He provides estate and tax planning services to individuals and businesses. Sabin also offers seminars on a variety of estate planning topics to both the general public and private groups.
Sabin is a member of the American Academy of Estate Planning Attorneys, the Estate
Planning Council of Chatta-nooga, the Chattanooga Bar Association and the Tennessee Bar Association.
He received his Bachelor of Science degree in Aeronautics from Embry-Riddle Aeronautical University and earned his Juris Doctorate at Regent University.
Sabin and his wife, Patricia, have three children and two grandchildren. Outside of the office, he enjoys a number of activities, including golf, attending theater and concert events, and spending time with his family. He attends church at Grace Calvary Chapel and has participated in ministries throughout the Chattanooga area.
For more information about estate planning, visit www.sabinestateplanning.com.
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