The new tax laws have not made estate planning simpler. They have created a situation where it would be wise to take a fresh look at estate, retirement and disability planning, because those plans work together in one package, according to the Daily Times in “Planning Ahead: Estate planning is not just tax planning.”
Wills have often been drafted for people in upper tax brackets concerning assets and what belongings should be passed to children and grandchildren. However, because federal estate exemptions are now very different, the question arises on whether the estate plan achieve the goals desired?
Here are some of the questions to ask:
- What do I own?
- Can I maximize what I own?
- Where will my assets go upon my death?
- Who will care for minor children or disabled relatives, if I die?
- What will happen if I become disabled?
- Will I have enough to pay for my children’s education, my retirement, or for even my potential disability or that of my spouse?
Estate planning goes beyond drafting a simple will, or even a complex trust. Wills and trusts are personal documents. Sometimes people decide that other things are more important than taxes. That’s why a simple online form does not answer all the questions when creating a will.
An unmarried couple may decide there are more tax benefits to being married, if a state has an inheritance tax that is higher for people who are not related.
It makes the most sense to name a young person as a beneficiary of an IRA, so the asset can grow (“stretch”) over the years. However, you may have someone else in mind for the IRA.
Decision making in estate planning is not something that happens instantly, and it does change over time. That is why it is important to review an estate plan every few years.
The critical thing is to have an estate plan in place. You can adjust it as time goes by, but without one your family faces many added difficulties and costs.
An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances.
Reference: Daily Times (April 9, 2019) “Planning Ahead: Estate planning is not just tax planning”