Estate Planning Resources

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Estate Planning Checkup

Do you have a Will?
If you have minor children, do you have a current Will which names Guardians?
If the total gross value of all your assets is over $100,000 do you have an Estate Plan?
If you have a Living Trust, have you transferred your assets into it?
In case you become disabled, have you nominated someone to handle your financial affairs?
Do you have a current Health Care Power of Attorney that provides the names, addresses, and telephone numbers of your designated agents to handle your medical care if you’re disabled?

Do you have provisions in your Trust or Will that address the issue of death taxes?
If you want to make gifts to charities at your death, are they clearly set forth in your planning documents?
Do your planning documents clearly set forth how your personal property will be distributed at your death, including the care of any surviving pets?
Since you signed your planning documents, have you changed your mind about any aspect of the plan?
Has the value of your assets substantially changed since you signed your planning documents?
Have you substantially changed the kind of assets you own since your planning documents were signed?
Have you been married, divorced, or widowed since your estate planning documents were signed?
Have you had children since your estate planning documents were signed?
Have your children had children?
Have any of your children been married, divorced, or died since your planning documents were signed?
Have you, your spouse, or child(ren) become physically or mentally incapacitated since your planning documents were signed?
Have you bought or sold a house or other piece of property since your planning documents were signed?
Are you contemplating selling stock or other valuable assets with a low cost basis?
Have you moved between states since your planning documents were signed?
If you have a Living Trust, are Medicaid triggers in place to ensure that at the appropriate time Medicaid planning can be implemented?

Feel free to make an appointment with our firm to review your estate plan.

Estate Planning Definitions

Annual Gift Tax Exclusion:

Technique to allow gifts without the imposition of estate or gift taxes and without using lifetime exclusion.

Children’s or Grandchildren’s Irrevocable Education Trust:

A Trust used by parents and grandparents for a child’s or grandchild’s education.

Charitable Remainder Interest Trust:

A trust whereby donors transfer property to a charitable Trust and retain an income stream from the property transferred. The donor receives a charitable contribution income tax deduction and avoids a capital gains tax on transferred property.

Family Limited Partnership:

An entity used to:

Provide asset protection for partnership property from the creditors of a partner
Protect limited partners from creditors
Enable gifts to children and parents maintaining management control
Reduce transfer tax value of property

Federal Estate Tax:

A tax levied by the federal government upon the estate of a deceased person. The federal government gives certain exclusions and deductions and then taxes everything above a set level.

Fractional Interest Gift:

Allows a donor to transfer partial interests in real property to donees and obtain fractional interest discounts for estate and gift tax purposes.

Funding:

Is the process that entails transferring assets you own as an individual into the name of your Trust.

Generation Skipping Tax:

This is a tax levied on assets given to individuals who are more than one generation removed from the donor. An example would be a grandparent giving an asset to a grandchild either during the grandparent’s lifetime or at the grandparent’s death. Effective use of the generation-skipping exemption allows the assets to avoid estate tax inclusion in the child’s taxable estate.

Guardianship/Conservatorship:

Is a court-supervised proceeding which names an individual or entity to manage the affairs of an incapacitated person. A guardianship may also include the duty to care for the incapacitated person.

Health Care Power of Attorney:

Instrument used to allow a person you name to make health care decisions for you should you become incapacitated.

Irrevocable Life Insurance Trust:

A Trust is used to prevent estate taxes on insurance proceeds received at the death of an insured.

Joint Tenancy:

When property is held in joint tenancy with rights of survivorship by two or more people, upon the death of one of the owners, all of his or her interest in the property is transferred immediately to the surviving owners.

Living Will:

Sometimes called a physician’s directive, it is a document in which you give directions for life-sustaining treatment should you become unable to communicate your wishes. Some states have combined this into the advanced health care directive.

Pour Over Will:

Is used first to name a guardian for minor children. Second, it protects against intestacy in the event any assets have not been transferred into the Trust at the death of the Trustor/Owner. Its function is to “pour” any assets left out of the Trust into it so they are ultimately distributed according to the terms of the Trust.

Private Foundation:

An entity used by higher-wealth families to receive charitable income, gift, or estate tax deduction while allowing the family to retain some control over the assets in the foundation.

Probate:

Is the court procedure used to change the title to assets from the name of an individual who has passed away to the name of the beneficiaries? It is also where all creditors of a decedent file claims to collect their debts and where interested parties can “contest” the Will. An individual who passes away with a Will or no estate plan will go through this process.

Property Power of Attorney:

An instrument used to allow an agent you name to manage your property.

Revocable Living Trust:

A device used to avoid probate and provide management of your property, both during life and after death.

State Estate or Inheritance Tax

A state estate tax is a tax levied by a state government upon the estate of a deceased person. It is levied in much the same way as the federal estate tax. A state inheritance tax is a tax levied by a state government that varies depending upon the relationship of the inheritor to the deceased person. Nearly half the states have a separate state estate or inheritance tax which kicks in at a lower level than that of the federal government.

Step-up in Basis:

A step-up — or step-down-in basis is an adjustment for income tax purposes to an asset’s fair market value at the date of the death of the owner of the asset. For example, if you bought a share of stock for $100 that increased in value to $500 at the time of your death, your tax basis was $100, but it increases to $500 at the time of death.

Trustee:

The person or entity in charge of the assets in a Trust. While you are alive, you may act as Trustee. For married couples, either one or both spouses may act as Trustee or co-Trustees. The successor Trustee is an individual or corporation fiduciary whom you designate to be in charge of your Trust in the event of disability or upon death.

Will:

A legally enforceable declaration of how a person wishes his or her property to be distributed after death. In a Will, a person can also recommend a guardian for his or her children.

Incapacity Planning Definitions

Power of Attorney:

You empower someone else to act on your behalf. Technically, this person becomes your “Attorney in Fact”, but is more commonly referred to as your “Agent”.

General Power of Attorney:

Provides your Agent with broad authority. It says that at any time – and in just about any capacity – your Agent can conduct business in your name. The Agent can be given great discretion.

General Durable Power of Attorney:

This is a General Power of Attorney that remains valid even during your incapacity.

Durable Power of Attorney for Health and Living Will:

These documents authorize termination of life support if you are terminally ill and appoint an Agent of your choice to make health care decisions for you if you become incapacitated.

Gifting Language:

Special language that may be drafted and included with your Trust document and Power of Attorney to give authority to gift assets to accomplish planning goals.

Medicaid Triggers:

These “triggers” or events can put into motion the shift of assets out of the name of the person who is incapacitated in order to qualify for Medicaid benefits.

Conservatorships/Guardianships:

This is a court-supervised proceeding that names an individual or entity to manage the affairs of an incapacitated person.

HIPAA Release:

The Health Insurance Portability and Accountability Act of 2003, known as “HIPAA,” created privacy protections for medical information that prevent hospitals and physicians from providing your personal health information to anyone who is not listed in a signed HIPAA Release. This release allows the Agents under your Advance Health Care Directive/Durable Power of Attorney for Health Care and the Trustees under your Revocable Living Trust to carry out their duties.

Is Your Estate Plan Outdated?

Review the questions below to see if it is time for an Estate Plan Check-Up

Has it been more than 3 years since you reviewed your current estate plan?
If you have minor children, does your estate plan name Guardians for them?
Since creating your estate plan, are your children now adults?
If you have a Trust, are there any assets that you have not transferred into your Trust?
If you become disabled, is your Power of Attorney document for financial decisions older than 5 years?
If you become disabled, is your Power of Attorney document for health care decisions older than 5 years?
Are there any gifts you would like to make to charities at your death that have not been clearly set forth in your planning documents?
Is there any personal property that you would like distributed that has not been clearly set forth in your planning documents, including the care of any surviving pets?
Since you signed your planning documents, have you changed your mind about any aspect of the plan?
Has the value of your assets changed since you signed your planning documents?
Have you added or changed the kind of assets you own since your planning documents were signed?
Have you been married, divorced, or widowed since your estate planning documents were signed?
Have you had children since your estate planning documents were signed?
Have your children had children?
Have any of your children been married, divorced, or died since your planning documents were signed?
Have you, your spouse, or child become physically or mentally incapacitated since your planning documents were signed?
Have you bought or sold a house or other piece of property since your planning documents were signed?
Are you contemplating selling stock or other valuable assets with a low cost basis?
Have you moved between states since your planning documents were signed?
If you have a Living Trust, are Medicaid triggers in place to ensure that at the appropriate time Medicaid planning can be implemented?

If you have answered ‘YES’ to any of these questions, it is a good idea to schedule a review appointment.

Top 10 Estate and Legacy Planning Techniques

Revocable Living Trust: A device used to avoid probate and provide management of your property, both during life and after death.
Property Power of Attorney: Instrument used to allow an agent you name to manage your property.
Health Care Power of Attorney: Instrument used to allow a person you name to make health care decisions for you should you become incapacitated.
Annual Gift Tax Exclusion: Technique to allow gifts without the imposition of estate or gift taxes and without using lifetime exclusion.
Irrevocable Life Insurance Trust: A trust used to prevent estate taxes on insurance proceeds received at the death of an insured.
Family Limited Partnership: An entity used to:
1. Provide asset protection for partnership property from the creditors of a partner
2. Provide protection for limited partners from creditors
3. Enable gifts to children and parents maintaining management control
4. Reduce transfer tax value of property.
Children’s or Grandchildren’s Irrevocable Education Trust: A trust used by parents and grandparents for a child’s or grandchild’s education.
Charitable Remainder Interest Trust: A trust whereby donors transfer property to a charitable trust and retain an income stream from the property transferred. The donor receives a charitable contribution income tax deduction, and avoids a capital gains tax on transferred property.
Fractional Interest Gift: Allows a donor to transfer partial interests in real property to donees and obtain fractional interest discounts for estate and gift tax purposes.
Private Foundation: An entity used by higher-wealth families to receive a charitable income, gift, or estate tax deduction while allowing the family to retain some control over the assets in the foundation.