Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Thursday, January 3, 2013

Non-Tax Estate Planning Considerations

Unknown-9In order to optimize an estate plan, one should consider the following non-tax considerations: 

1. Plan For the Possibility of Estate Tax: Don't ignore the tax laws completely and it might be wise to insulate assets from future estate taxation by allocating some of the deceased spouse's assets to a separate trust that is covered by the deceased spouse's exemption amount.

2. Reassess Existing Life Insurance Policies: One should review his or her life insurance policy regularly to ensure the policy will remain in effect through the insured's death and is performing competitively with currently available insurance products. 

3. Incorporate Asset Protection Planning into Estate Plans: It is wise to structure a child's inheritance in a way that protects the assets from unforeseen circumstances. 

4. Plan For The Disposition of Family Businesses: A business owner's estate plan should address the future ownership, voting control, and management of the family business. 

5. Clearly Identify Estate Beneficiaries: Avoid inadequate or incorrect identification of a beneficiary that could give rise to litigation. 

6. Fund And Periodically Review Revocable Trusts During Lifetime: A periodic review of revocable trusts ensures that assets remain in the name of the revocable trust. 

7. Review Beneficiary Designations For Life Insurance Policies, IRAs, Retirement Plans, And Annuities: The beneficiary designation, not the will, controls these policies, so it is important to pay close attention to who is designated.  And if it is a child who is designated, then an expense trust or a custodial arrangement should be made if that child is a minor.  Otherwise, the assets are held by a court-appointed guardian until the child turns 18 and the court can distribute the assets outright to the child. 

8. Use Durable Powers of Attorney and Health Care Powers Of Attorney To Plan For Incapacity: These documents should designate an alternate agent in addition to an agent. 

9. Generally, Avoid Joint Tenancy in Assets or "Transfer On Death" Accounts: Such accounts frequently produce results at odds with an individual's estate plan and can lead to litigation, so it is best to deal with these assets through a well-drafted will or trust. 

10. Provide For Flexibility In Trust Arrangements:  Provisions can be made for the naming of future, currently unidentified, beneficiaries and removal and replacement of an ineffective trustee. 

See Stuart B. Dorsett, Top 10 'Non-Tax' Estate Planning Recommendations, WRAL Tech Wire, Jan. 2, 2013. 

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.


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Thanks for posting. With the onset of the latest tax law-a permanent estate tax law, it would seem that these considerations would be at the forefront of discussions for the vast majority of our clients. I have noted commentators who suggest that nothing need be done to existing plans, especially "tax driven" plans even though they are dominated by language which is impossible for the ordinary person to understand and rendered largely irrelevant by the law. In the short period since the law was enacted I am being surprised by the number of clients who have expressed interest in unraveling complicated tax driven plans in favor of simpler ones in order to gain the enhanced piece of mind which comes from genuine understanding.

Posted by: brian j. cohan | Jan 5, 2013 3:00:53 PM

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