It is 2013! The estate planning frenzy of 2012 has passed and as I draft this article, we don't know what the new law will be; however, there are still plenty of opportunities to stay on top of your estate planning affairs. My top three are:
1. Determine if you are properly insured.
2. Revisit your financial/retirement plan (or make one) and verify that you are doing all that you can to make it work.
3. Confirm that your current estate plan does all that it was designed to do.
As to the first two items, our community is blessed with numerous advisers; if you aren't working with someone already, get a referral and find one who can help you figure out your needs and your plan.
Then, once those items are addressed, we can focus on the estate plan. Because so much information can be easily gleaned from the year-end financial documents that you receive each January, I recommend that you use this time of year to revisit your estate plan.
First, look at the people listed in your plan. Are your executors, trustees, power-of-attorney agents and beneficiaries still competent and ready to serve in whatever capacity you have identified? If you are using beneficiary designations, revisit the amounts in each account and each designation. It might be time to rebalance or consider a more holistic type of plan which works much better to achieve your goals if you have multiple beneficiaries and become disabled.
Next, if you have a revocable trust, verify that it is properly funded. As you receive year-end statements and 1099s, look to see if the trust is listed as the account holder. Do this every year, as sometimes account names get changed when banks merge or computer systems are updated. In Nevada, we recommend that most checking accounts and automobiles be owned by the trust. When funding your auto to your trust and to avoid Department of Motor Vehicles scrutiny, work with your auto insurance agent to make sure that your insurance properly reflects the trust as well.
Revisit your IRAs, 401ks, and insurance policies and designations and consider new planning with these assets. IRAs and 401ks can be left to trusts that have "see through" or "conduit" provisions. And, with a $1 million estate planning exemption and a $1 million life insurance policy held your personal name, that policy will use your entire exemption, leaving the rest of your estate to be taxable at up to a 55 percent rate.
Depending on how our nation maneuvers the fiscal cliff, some families may need a complete overhaul on their estate plans or investment strategies. Regardless of how 2013 plays out, tax rates are a moving target and are likely on the rise - not critically, but enough to warrant extra attention. Make sure you have your team in place and check with them to assure that your processes and plans will work in 2013.
• Darcy Houghton is a resident of Carson City and accepts cases in estate planning and business law. She may be reached at 775-882-1777, or visit her website at www.hou2plan.com.
Article Topics: Legislature: PERSLegislature: PERS