Tuesday, January 22, 2013
Now that the rush to make wealth transfers has come to a halt, clients who made those last minute transfers might want to take this opportunity to review their estate planning documents. In particular, clients might to examine who they have chosen as the trustee of their trusts and talk to their children about any money they might been have given to them. Sometimes a younger sibling is left out of being chosen to be the trustee, the older more money-savvy child often become the trustee to the detriment of the younger child. It is possible to change the trustee but it can be difficult. Additionally, parents might want to examine the amount of money they have given to their children through a FLP. Often parents forget that they need money to live and support themselves. Luckily for parents, a parent can instruct the general partner to withhold any distributions assuming that the child has taken any the distribution.
There are other technicalities that should be taken care of at this time. Clients might want to consider checking to see whether the appropriate gift tax return were filed with their income tax. For attorneys, it is important to remember that "some clients still need valuations for their assets, such as real estate, which was transferred into an irrevocable trust." An attorney might also want to consider making a flow chart of the transfers for his or her client. It is important for the client to understand where their money has gone.
See Susan R. Lipp & Dawn S. Markowitz, Revisiting 2012 Family Wealth Transfers, Wealth Management, Jan. 15, 2013.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.