Of course estate planning is done to minimize taxes and ensure the financial matters are done as desired. However, the planning for other than taxes is important.
Designating the best trustee or executor and possible successors isn’t easy, but extremely important to being sure the administration goes smoothly.
As time goes by, it might be important to update the documents for any special needs provisions (one of the beneficiaries is receiving state welfare or has special medical problems).
If there’s a change in the family’s situation, ask your attorney for assistance in determining what, if any, changes in the documents and provisions should be considered.
If the size of your estate has changed, perhaps a review of the overall financial distribution plans is in order. Maybe doing more gifts during lifetime will help meet the goals and desires. The current gift tax Annual Exclusion is $14,000 total gifts per year, per person. Annual Exclusion gifts aren’t taxable for gift tax reporting, but they reduce the estate and may help the beneficiaries now instead of later. If the annual gifts are more than the Annual Exclusion, the excess just reduces the amount that’s not subject to death tax.
The death tax (estate tax on form 706) isn’t a problem for most folks. Each person can leave $5,490,000 without incurring a death tax (that’s the death tax exclusion). If a gift is done so $100,000 is a taxable gift, it means the death tax exclusion is reduced to $5,390,000. That’s not a problem for most of us.
Perhaps some new property has been acquired since the estate planning documents were done and the new property isn’t titled correctly. If the trust is the main part of the planning, you probably will want to be sure the new property is titled in the name of the trust.
Maybe the beneficiary designations need to be revised. This is especially important to verify for IRA accounts, other retirement plans, life insurance and annuities and stockbroker accounts, etc. if a divorce happened after the estate planning was done, getting the correct beneficiary designations recorded can avoid some unpleasant surprises.
It’s suggested that annual review of your estate plans is a good idea, even if there are no changes.
Did you hear? “I think you earn the right to do things the way you want to do them,” by Reba McEntire.
John Bullis is a certified public accountant, personal financial specialist and certified senior adviser who has served Carson City for 45 years. He is founder emeritus of Bullis and Company CPAs.