Estate Planning Tips

Estate Planning Tips


Listed below are estate planning tips for individuals with larger than normal estate valuations.

1. Exercise Swap Powers – make sure there are adequate lines of credit to finance the swap

2. Watch for Waning Capacity – many individuals lose mental capacity as they age, so the sooner you begin estate planning the better.

3. Amend Family Limited Partnerships –be careful about discounts as the discounts could reduce the basis step-up upon death thereby causing higher capital gains taxes.

4. Review trust distribution standards – this allows a mechanism to move highly appreciated trust assets back into the estate to gather an increase in tax basis.

5. Review the state laws in state that the trust was established; historically wherever you create a trust that state’s law applies.

6. Review asset distributions – rather than a 50/50 split some beneficiaries might prefer specific assets such as securities or a home.

7. Look at funding bequests or trusts with appreciated assets as it might trigger taxable gains on the assets.

8. Review unfunded trusts- tax benefits may no longer apply for outdated trusts.

9. Review Executor commissions (fees) – review the personal economic and tax consequences of paying commissions.

Estate laws change often, so do review your estate plan every three or so years and seek assistance from an estate planning attorney not an attorney who is a generalist.

If you have significant assets in securities such as stocks and bonds, I would also suggest you work with an investment advisor as well. Attorneys are generally not versed in financial planning concepts and specifically investments. That most likely will hold true for your accountant as well.

If you fail to do proper estate planning your heirs will pay the price sometime down the road.

 

Daniel Iuculano, AAMS CMFC

Accredited Asset Management Specialist

Chartered Mutual Fund Counselor

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