The Nature and Scope of Estate Planning

Many students of industrial psychology have argued that satisfaction of the hierarchy of needs of the individual is a precondition of high achievement, and there need not be a conflict of goals. See, for example, Katz Robert L. , “Toward a More Effective Enterprise,” Harvard Business Review, XXXVIII (Sept. 1960); Argyris Chris , “The Individual and the Organization: Some Problems of Mutual Adjustment,” Administrative Science Quarterly, June 1957; Maslow Abraham H. , Motivation and Personality (New York: Harper and Bros, 1954).

Maslow Abraham H. , op. cit., p. 91, offers the concept of self-actualization, the tendency or desire “to become everything that one is capable of becoming” as an ultimate goal.

There are no uniform questionnaires for the analysis of estates. Each estate planner attempts to develop as much of the data as he believes to be relevant for his purposes. The specification of all of the items of information required in a large estate could theoretically run to thousands of information bits. Examples of questionnaire forms may be found in Brosterman Robert , The Complete Estate Planning Guide (New York: McGraw-Hill Book Co., 1964); Casey William J. , Estate Planning Desk Book (New York: Institute for Business Planning, 1965); Casner A. James , Estate Planning (3rd ed.; Boston: Little, Brown and Co., 1961); Appleman John Alan , ed., Basic Estate Planning (New York: Matthew Bender and Co., 1957).

The respective roles of members of the estate planning team are the subject of a vast amount of literature. See Brown L. M. , “Roles of the Underwriter and the Lawyer,” Insurance Law Journal, Nov. 1952; Collins B. S. Kellam J. J. Otterbourg M. E. , “Attorney Trustman and Underwriter in Estate Planning,” Trusts and Estates, Oct. 1951; Power H. T. , “The Lawyer-Life Underwriter Team Pulling Together in Estate Planning,” Journal of The American Society of Chartered Life Underwriters, June 1949; Larson J. G. , “Participation by the Certified Public Accountant in Estate Planning,” Washington Law Review, XXIV (Aug. 1949); Polisher Edward N. , “Estate Planning—The Role of the Accountant,” Journal of The American Society of Chartered Life Underwriters, 1946; Bernbaum Sanford M. , “Role of the Advanced Underwriter in Estate Planning,” Washington Law Review, XXIV (1949); Stephenson G. T. , “The Trust Officer's Role on the Estate Planning Team,” Trust Bulletin, 1953; Potts Robert Emerson , “A Psychologist Looks at Estate Planning,” Journal of The American Society of Chartered Life Underwriters, Fall 1956.

For a comprehensive treatment of the subject of business risk management, see Mehr Robert I. Hedges Bob A. , Risk Management in The Business Enterprise (Homewood: Richard D. Irwin, Inc., 1965).

Even with the best planning, some legal risk remains. See, for example, Hutcheson Sterling , “Lawyers, How Is Your Malpractice?” Insurance Counsel Journal, XXX (July 1963).

The Marilyn Monroe estate provides a tragic example of poor tax planning. Berman Art , “Marilyn Monroe Debts, Taxes Erase $1 Million,” Los Angeles Times, June 22, 1965: “Marilyn Monroe's $1 million estate has been wiped out by debts and taxes and there is nothing left for her beneficiaries, it was learned. … Even the bills for care of the late actress' mentally ill mother have not been paid lately … an accounting of the estate … shows that $452,000 went for federal income tax, while another $118,000 went to cover disallowed deductions on income tax returns filed from 1958 to 1962. … State tax consumed $64,850, while estimated federal estate and New York inheritance tax took $150,000.”

Laymen believe that “When the heirs fall out, the lawyers inherit the estate!”

Richard H. Forster and panelists, Tax, Legal, and Practical Problems Arising From the Way in Which Title to Property is Held by Husband and Wife, Los Angeles: University of Southern California School of Law, Institute of Federal Taxation, Oct. 21, 1965 (mimeo).

An excellent discussion of alternative investment goals is provided in Graham Benjamin , The Intelligent Investor (New York: Harper and Bros., 1954).

The ethical problem is confronted directly in Gutkin Sidney A. Beck David , Tax Avoidance vs. Tax Evasion (New York: Ronald Press Co., 1958) and by Paul Randolph E. , “The Lawyer as a Tax Adviser,” Rocky Mountain Law Review, XXV (1953), 412. In U.S. v. Isham, 17 Wall 496, 506, the court said: “Anyone may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the treasury; there is not even a patriotic duty to increase one's taxes.” In Commissioner v. Newman, 159, F.2d 848, 850, 851, (2d Circ. 1947), Justice Learned Hand stated: “Over and over again courts have said that there is nothing sinister in so arranging one's affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands; taxes are an enforced exaction, not voluntary contributions. To demand more in the name of morals is mere cant.”

See Pfeffer Irving , “The Liquidity Problem in Estate Planning,” Journal of The American Society of Chartered Life Underwriters, XIX (Spring 1965).