Estate planning is an essential part of anyone’s personal finances — no matter how wealthy you are. But even for those who have been diligent about planning for their spouses and heirs, this is a year when it may make particular sense to re-examine your strategy.

With the nonstop flurry of legislative activity in Washington, Congress has still not acted on the phase-out this year of the estate tax. If nothing is done this year, the heirs of any person who dies in 2010 won’t be liable for any federal estate taxes, no matter how big the estate. (The carryover basis rules for 2010, however, may give rise to additional planning considerations.)

Yet the potential bad news will come next year when the estate tax is scheduled to return with a vengeance on all estates over $1 million in size (the threshold was $3.5 million for individuals in 2009) with a potential return to a 55 percent top tax rate..

It’s worth a trip to your estate planner and your financial planner to help ensure your paperwork is in order and the previous plans you’ve made won’t cause problems.

Family trusts – also called bypass or credit shelter trusts – are of particular concern. These trusts work this way: Individuals add what’s known as a formula clause to their will or revocable trust that distributes up to the maximum amount of assets that can pass free of estate tax to the trust if the individual dies before their spouse. The creation of the trust helps ensure that once your spouse dies, neither these assets nor any appreciation on them will be subject to estate tax. But if you die this year, a failure to address the formula clause could potentially cause you to unintentionally disinherit your spouse.

The bottom line: It’s worth making a call to a financial planner and your estate attorney to make sure your plans are still in order.

And what if you’ve never made an estate plan? Even if you’re not particularly wealthy, you definitely need one. Here are some specific things you should do and make sure you have in place:

Make a financial plan: You can’t have a very effective estate plan without a full grip on your finances. First, sit down with a financial planner to gain an understanding of all the various aspects of your finances from your income and investments to your debt. Add various facts about your family situation to the mix, and that’s the starting point for an estate plan.

Make a will your first priority: Unless you have a very complicated estate, a standard will with wording common to your state may be satisfactory to properly dispose of your assets, but it’s generally a good idea to get feedback from an estate attorney to make sure your will fits you and your financial structure.

Create all necessary directives: It’s important to create a durable power of attorney to oversee financial issues and a healthcare proxy to appoint a trusted individual to oversee health-related decisions if you are unable to do so for yourself. Some states will allow you to appoint more than one individual in each role to allow for checks and balances, but it’s particularly important to work with an experienced estate attorney to make sure things are done right.

Establish guardianship and financial directives for your children: If you and your spouse were to die at the same time, who would take care of your kids? Based on your state’s requirements, your decision may need to be written up as part of or an addendum to your will. It’s also a good idea to name alternates in case the people you name have a change of heart for any reason, or if something happens to them. If your children are to inherit substantial assets or insurance proceeds, it is also wise to make sure that their guardians are qualified to handle that money. If not, someone else should be legally named to do so.

Review all beneficiary information: Make sure all your beneficiary designations on retirement accounts, insurance and other assets not distributed through your will or trust are current and clear.

Consider transferring IRA assets to a Roth: You’ll take a tax hit with the conversion, but converting traditional IRAs into Roth IRAs removes another headache for your heirs because no income tax will be assessed once the funds are withdrawn, assuming certain requirements are met.

May 2010 — This column is produced by the Financial Planning Association, the membership organization for the financial planning community, and is provided by Martin V. Higgins,, a local member of FPA.

By Harvey Mackay

Disagreements happen. You can’t always get your way. Everyone has an opinion. There are two sides to every argument.

When you’re dealing with family or friends, you expect to have differences of opinion. Perhaps you are willing to fight for your views and what’s important to you. And often, because of the personal relationships you have, you find a way to work things out.

At work, the dynamic is very different. The professional relationships you develop are based more on achieving success and moving up. Of course, you’ve become friends too, but competition is still part of the system. You want to be seen as a team player, but you want your ideas respected. You don’t want to get a reputation for making trouble. You need to be picky about picking fights.

Disputes that are not worth pursuing fall into several categories:

• The other person will not change. Perhaps they are just as grounded in their principles as you are, and not willing to listen or consider another point of view. Compromise may not be an option in any case.
• The results won’t change the outcome substantially. Think hard about whether it is more important to get your way or to just let it go.
• All the facts aren’t available. Decisions need to be based on the best possible information. Guessing to fill in the blanks will not benefit anyone.
• Other issues are more important. Keep your priorities straight and concentrate on the most pressing issues. Not all issues carry the same weight.
• You’re just trying to prove yourself, not improve the situation. What you will prove is that your ego is more important than the problem you are trying to solve.
• You really have no chance of winning. You may be a voice in the wilderness, and 100 percent correct in your assessment, but save your breath until you can realistically bring others around.

But there are valid reasons for holding your ground, which need no explanation. Pursue a fight when: Your own ideas are being stolen. Your reputation is at stake. Your company’s reputation is being threatened. The action being taken is unethical or illegal. And cost is a major factor.

When an argument ensues, focus on the issue, not the person raising the objection. Make sure your facts are correct and complete. Have documentation available to back up your points. Stay calm — yelling and ranting make you look out of control rather than on top of the issue. Respect the other people and let them have their say. Compromise wherever possible. Bear in mind that you will be working with these co-workers and the success of future dealings hinges on how you treat them.

Letting a disagreement fester is counterproductive in many ways: It creates a hostile workplace, discourages teamwork, wastes time and resources, and in the end, accomplishes nothing. Everyone loses.

Fortunately, with some preparation, you can improve your chances of persuading others to consider your ideas. If I know I’m going into difficult negotiations, I don’t want the result to be an argument. I want everyone to feel like they contributed to the solution. It has to be a win-win situation. Here’s how I proceed:

• Anticipate the sticking points. I never walk into a presentation or meeting without considering what issues and objections might arise. I develop a game plan to deal with concerns and to convince them that the solution I am proposing will address their objection.
• Stay on topic. Stick to the issues, and redirect the conversation back to the original issue if conversation wanders.
• Don’t take objections personally. Pay close attention to the reasons others are challenging your ideas, and try to see the issues from their perspective. If my solution creates a new problem for them, I am willing to reconsider. The point is to solve problems.
• Ask for help. I look to advisers and employees for great ideas. This accomplishes two things: It helps me see the problems from several points of view, and it demonstrates that I am willing to be a team player. I want the best ideas out there, and I don’t always care where they come from.

Differences of opinion don’t have to be dead ends. Learn how to pick your battles, and put your energy into finding the best possible solutions.

Mackay’s Moral: You have a right to fight for what’s right.

[Ed Note: To learn more about handling disagreements in the workplace effectively, without wasting time or money, check out ETR's Epiphany Alliance personal success program. From your personal mentor Bob Cox, you'll learn dozens of techniques for organizing your life at home and at work so you can achieve all your most important goals. Find out more here.

Harvey Mackay has written five New York Times bestselling books, two of which were named among the top 15 inspirational business books of all time -- Swim With the Sharks Without Being Eaten Alive and Beware the Naked Man Who Offers You His Shirt. His latest book, Use Your Head to Get Your Foot in the Door: Job Search Secrets No One Else Will Tell You, was released on Feb. 18. Harvey is a nationally syndicated columnist and has been named one of the top five speakers in the world by Toastmasters International. He is chairman of the $100 million MackayMitchell Envelope Company, a company he started in 1960.]