Want a good return on an investment? Put a little time into planning your estate, and you and your family will receive big benefits.

Your estate consists of all your property, including

• your home and other real estate,
• tangible personal property such as cars and furniture, and
• intangible property like insurance, bank accounts, stocks and bonds, and pension and social security benefits.

Through your estate plan, you can decide how to protect and provide for your family in the event of your death or incapacity. You can also plan how you'll provide for your kids' or grandkids' education, or determine how to help a favorite cause, such as a charity, hospital, or college.

Want more? You can also plan to reduce taxes, sometimes saving hundreds of thousands of dollars, if not more. And if you have a business you can provide for its continuation and an orderly succession when you're no longer in the picture.

While a will or trust is often the most important part of an estate plan, it's not the only part. These days, your lawyer will also help you create your living will or health care advance directive as part of the process. And, working with your lawyer, you can be sure that your will or trust is coordinated with your pensions, the gifts you make, your life insurance, the property you hold in joint ownership, and all the other ways you can transfer property at or before death.

Who Needs an Estate Plan?

Everyone. One glance at the news demonstrates that far too many young and middle age people die suddenly, often leaving behind minor children who need care and direction. And estate planning can be part of your overall financial plan, where you set goals for your children's college tuition and your retirement needs. If your finances or family circumstances change later in life, it's usually easy and inexpensive to adjust your plan.

Most people also plan for mental or physical incapacity resulting from an accident or illness. Through living wills, health-care advance directives, and other mechanisms, they control beforehand how they are to be cared for if disaster strikes. Through a living trust, they can control how their property is to be managed and their family supported in the same circumstances.

If you die intestate (without a will), and you don't transfer your property by some other means--such as a trust, joint ownership, or beneficiary designation (for insurance, IRAs and the like)--state law will step in and decide how to distribute it. This doesn't mean that your money will go to the state. That happens only in very rare cases where you leave no surviving relatives, even very remote ones.

But it does mean that the state will make certain assumptions about where you'd like your property to go--assumptions with which you might not agree. Some of your hard-earned money might end up with people who don't need it. Meanwhile, others who might need the money more, or who are more deserving, could be shortchanged. And surviving relatives may squabble over who gets particular items of your property, since you didn't make these decisions before you died.

The only way to assure that your property will go where you want it to, and that your other goals will be achieved, is to plan your estate. Only estate planning gives you the feeling of control that comes from knowing your family is provided for as you wish.

How the Planning Process Works

Begin by taking a quick inventory of your assets and liabilities. Total up

• your income, including dividends and interest;
• the amounts and sources of retirement benefits, including IRAs, pensions, Keogh accounts, government benefits and profit sharing plans;
• your financial assets, such as bank accounts, brokerage accounts, certificates of deposit, T-bills, outstanding loans, etc.;
• real property, including your home and other real estate;
• life insurance policies.

Don't forget to consider your debts as well, including mortgages, installment loans, business debts, and the like.

Then think about how you want that property to be used. Think too about what you'd want to happen in the event you are incapacitated-how would you want yourself, your property, and your loved ones cared for?

Doing all this preparation will simplify the process, but remember that creating a will or trust is seldom as simple as filling in blanks on a form. Most people will meet with their lawyer twice in the process.

At the first meeting, you would probably discuss your financial situation and estate planning goals. Your lawyer will review any documents you've brought in and ask questions that will help you think through various issues and possibilities. Then, your lawyer will probably outline some of the options the law provides for accomplishing your goals. Though certain methods may be recommended over others, depending on your circumstances, it will still be up to you to make your own choices from among those options.

Then, based on the choices you have made, your lawyer will draft a will or trust. At a second meeting, your lawyer will review that document with you. If it meets with your approval, it can be signed then and there.

For more complicated estates, you may have some phone conversations with your lawyer, and perhaps have to review several drafts of various estate planning documents, before everything is settled.

You should review your estate plan periodically, so you'll want to stay in touch with your lawyer. Don't think of estate planning as a one-time retail transaction, but an occasional process that works best when you have a continuing relationship with your professional advisors.

Estate Planning Saves You Money

Good estate planning should minimize costs that come about after your death. These include the following:

Probate costs. Probate is the court-supervised legal procedure that (1) determines the validity of your will and (2) gathers and distributes your assets. The expenses of probate vary by state but good estate planning can minimize these expenses by passing assets through means other than a will, thus limiting the size of your probate estate. The smaller the estate, the lower the costs, especially if it is small enough to qualify for quick and inexpensive processing. Since a living trust avoids probate, the total cost of a living trust may well be less than the combined cost of a will and probate.

Executor fees. By having a will and planning well, you can minimize the executor's fees. Your executor carries out the provisions of your will. If you name a relative who's a beneficiary under the will as executor (most likely your spouse), he or she will probably waive the fee. And if your will gives your executor authority to act efficiently and says that a surety bond (which protects your estate if your executor does not perform his or her duties) will not be required, you can save your family money.

On the other hand, if you die without a will or trust, the probate court will appoint a personal representative to see the estate through probate, at a cost to be deducted from your estate.

In planning your estate, it's highly desirable that you and your family agree on what you're trying to accomplish. If you're married, you and your spouse should track down all your assets--what benefits each of you is entitled to, where the money is invested. It's especially important to find out how property each of you owns is titled, including insurance and other beneficiary designations. Of course, a couple should communicate with each other so they agree on what goes to the surviving spouse and what to the children.

Because estate planning affects several generations, it may be a good idea, especially if your family includes grown children, to make your estate plan a family affair. Some families set aside a day and gather all family members who are involved in the plan. The parents can explain how this plan can have a major influence on all their lives, and why they're distributing gifts and trusts the way they are. They can also find out whether the children want to continue the family business, and ask if any property has sentimental values for them.

And don't forget to tell the persons you've selected as executors or guardians of the children, to make sure they agree to serve. It's a good idea to name alternative executors or guardians in case your first choice can't serve when the time comes.

Raising Capital Through Loans, Investments

There are a number of ways of securing capital for your fledgling business, including contributions from yourself, loans from family and friends, and loans from banks. Your lawyer is your best guide to your particular situation, but here are some other general ideas about finding financial help.

Loans with Government Help

If you can't get money from good old Uncle Hank, Uncle Sam might be able to help. The Small Business Administration has loan and lease guarantee programs that are designed to encourage banks and other financial institutions to lend money to small businesses. The SBA doesn't make loans itself, but by guaranteeing most of the amount lent it encourages banks to make loans they might not normally make.

Many states also have special loan or guaranty programs or financial assistance packages and tax relief plans for small businesses. In some states, low-cost loans are available to child-care providers, small businesses located in enterprise zones, and historically underutilized businesses. Some have special provisions designed to promote growth in rural areas. You can get information about such programs from the local SBA office or the office of your equivalent state or local agency. You can get state information over the Internet by accessing www.state.[two-letter abbreviation of your state].us. Texas, for example, is www.state.tx.us.

You can find out about the many SBA loan programs by checking out its website (www.sba.gov) or by calling the SBA at 800-827-5722. Through the website, you can also get information about the SBA office closest to you.

SBA loans can be used for most business purposes, including purchasing real estate; construction and renovation; acquiring furniture, fixtures, and equipment; working capital; and purchase of inventory. Franchises are eligible too. The SBA limits the size of business it will help (your start-up should have no trouble meeting that requirement!) and it requires business owners to put some of their own money, including personal assets, into the business. The forms required for an SBA guarantee of a bank loan are many and complex. Your lawyer should be able to help you in this process.

Help for Women and Minorities

The SBA has programs that help small business development centers counsel minority and women borrowers on how to develop viable loan application packages. If the SBA approves a package, it will guarantee up to 80% of loans of up to $250,000.

The SBA also licenses Specialized Small Business Investment Companies to make loans to socially or economically disadvantaged individuals. A number of private loan programs also encourage business development by minorities, women, and people with disabilities.

Contributions from Others

If you're borrowing money, you're retaining full ownership of the company. Once the loans are repaid, you have no further obligations to the lenders. If you have investors, on the other hand, you're giving them a slice of the pie. You don't have to repay what they put into the business, but you'll have to share the profits with them.

Adding Investors. Under the law, investors who are actively involved in the business (active investors) generally have a different legal status from investors who are putting up money but not taking part in how the business is run on a day-to-day basis (passive investors). In general, they have more liability when things go wrong-i.e., responsibility for debts, liability in lawsuits against the business.

If you do involve other people in running the business, they might be your general partners, or general members(along with you) of a limited liability company.

If you have investors who aren't involved in the day-to-day operations, they're your limited partners, or limited members of your limited liability company, or shareholders of your corporation.

In general, you have more flexibility in securing investments from active investors, because state and federal securities laws aren't involved. Partnership agreements can be flexible. You and your partners can negotiate as to how much of the business will belong to them in return for their financial contribution and their work in the business. You don't have to divide things 50/50. You would, however, need a partnership agreement spelling out all the terms.

"Passive" Co-Owners. If you decide to seek funding from investors who aren't actively involved in running the business, you'll face significant legal ramifications, especially with federal and state securities laws. These are designed to protect investors and limit fraud by people seeking investors.

The securities laws apply to the sale of any "ownership interest" in a business where the profits are expected to come from the efforts of others. Under this broad definition, virtually all types of equity or debt ownership interest in a small business sold to people may be securities. For this reason, you should not contact anyone about investing in a business without fully reviewing your investment plans with your lawyer. This includes stock, debentures, and other similar corporate debt instruments, limited partnership interests, limited liability company membership interests, and even general partnership interests, where one or more of the general partners does not have the expertise (or authority) to participate in the management of the business.

When Bad Medical Care Harms You

Medical malpractice is a part of personal injury law in this country. In cases of personal injury, you generally allege that you have been harmed by the negligence of another person. Your lawyer is your best guide in any particular case, but here are some general questions and answers on medical malpractice.

What is medical malpractice?

Medical malpractice occurs when your doctor gives you medical care that does not meet the standard of care that other doctors would have given you in the same or similar situation and you suffer an injury as a result.

How does medical malpractice work?

In a civil case such as medical malpractice, you, the patient, would bring a lawsuit against a doctor. If a jury finds that the doctor acted negligently and you were injured as a result of that act, the doctor (or the doctor's insurance company) will have to pay you an amount that is determined by either the jury or the judge to compensate you for your injury.

A jury will compare your doctor's conduct with how other doctors would have acted if faced with the same or similar circumstances. The doctor is not compared to a person in the general population. Instead, the doctor is compared to other doctors with the same type of medical training and skills.

For example, if you are a 30-year-old woman who runs marathons and you tell your doctor you have chest pains, the actions your general practitioner doctor takes will be compared with what other general practitioners would have done if a 30-year-old female marathon runner came in complaining of chest pains.

Compensatory damages pay you a sum of money designed to make up for the money you've lost or spent because of the injury-cost of treatment, lost wages, etc.-and, in some cases, compensating you for pain and suffering. Some medical mistakes may have catastrophic consequences, crippling a patient for life. The costs of permanent care for a person totally paralyzed in an operating room blunder, for example, could be staggering.

Punitive damages are assessed when a doctor not only makes a mistake, but also acts so recklessly or carelessly toward you that a jury may decide to punish the doctor. Punitive damages are damages above and beyond the amount of money it will take to compensate you for your injury.

It is not automatically malpractice when your doctor gives you medical care and something bad happens. As long as your doctor uses reasonable care and skill in treating you, your doctor did not commit malpractice. Five doctors can examine and diagnose the same person and come up with five different opinions as to what medical care is needed. That does not mean that four of the doctors are wrong or incompetent. It means that there are many ways to treat that person. The key is that all the doctors acted according to acceptable medical standards and treated you as a reasonable doctor would have treated you.

First, you will need to prove that your doctor had a duty to you. This means you must have a doctor-patient relationship. Then you will have to establish for a jury that the medical profession itself has a standard of care for your illness or injury. In other words, that doctors are supposed to treat your type of medical condition in a certain way. After that you will need to show that you suffered an injury and that the injury was a result of the doctor's failure to give you appropriate medical care.

The attorney will ask you questions about what happened and take a look at your medical records. Your attorney should be able to tell you whether your claim is worth pursuing.

Yes. The court will look at your actions to determine whether you played a part in your own injury.

Let's pretend that you are a 30-year-old marathon runner complaining of chest pains. The doctor tells you that it probably is not a heart attack considering your age and activity, but that you should stop running for the next few days while the doctor runs some tests. You leave the doctor's office, drive to the gym and run five miles before dropping to the floor with a heart attack. Even if you could prove that other doctors would have diagnosed you as having a heart attack when you first walked into the doctor's office, the fact that you ignored your doctor's warning will be taken into account when a jury is deciding a malpractice case.

That is a factor that will be considered by the court. Just as the doctor must act reasonably, so must you. If a reasonable person would have taken the doctor's advice and not run five miles, then it was unreasonable for you to ignore the doctor's advice.

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.

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