Client Memo – Year End Estate Planning

by | Nov 20, 2012 | Client Memo, Real Estate

With the end of the year fast approaching and changes in the law scheduled to take place, we would like to remind you that this is a good time to evaluate your estate planning documents and strategies.  Here are a few considerations for you to consider:

  1. For the expiring $5.12 million lifetime estate and gift tax exemption, please see our memo – in Federal and CA Tax Rates.
  2. Please make sure that your will and trust documents are current and include instructions to physicians and financial powers of attorney. It is important that you consider granting your children financial powers of attorney to be in a position to sign checks and agreements and be able to access your accounts in the event that you are not able, or as you get older.

Additionally, please be sure that you have a listing of all assets, and that you have provided this in a location where your spouse or children can readily access it. It should include the following: retirement account numbers, bank, and brokerage account numbers, annuity, insurance policies, and contact information of your brokers, lawyer, and accountant, as well as passwords to your computer and online access. A second signature should be authorized on your bank accounts and financial powers of attorney if the second signer is not your spouse. I can assist you in recommending a trust lawyer if need be and also assist in structuring the terms of your trust.

  1. Make sure to schedule out all personal property that you would like to gift your children; and include the schedule in your trust document or an addendum to it. This will eliminate confusion among your children.
  2. Consider also including in your trust gifts to your grandchildren, in addition to the inheritance that your children will receive, so that they will remember that grandma and grandpa left them something.
  3. Further, please make sure that you have filled out a beneficiary designation form for all retirement plans. Your family trust should never be listed as a beneficiary because it prevents your heirs from deferring taxes on the amount inherited from your retirement accounts.
  4. All assets you own should be in the name of your revocable family trust to ensure your assets will not be subject to an expensive and lengthy court probate proceeding. These assets include investments in partnerships, LLCs, and S corporations, deeds to real estate (including primary and secondary residence), insurance policies, retirement savings, and all bank and brokerage accounts. Your trust lawyer or our office can assist to ascertain that this is properly taken care of.
  5. To ease the burden on the trustee, please be sure that you communicate regularly to your spouse and family members about important financial matters such as the location of records, and safe deposit boxes and keys. I also recommend that you have regular family meetings to discuss your wishes and your estate plan with your children to avoid confusion or any unnecessary litigation regarding your estate plan.

We encourage you to contact us for a year-end tax planning appointment sooner than later as many of the tax planning considerations are time-sensitive.  Start planning early helps to maximize available tax benefits.

Disclaimer: The information contained in this publication is intended solely to provide general guidance on matters of interest for the personal use of the reader, who accepts full responsibility for its use. In no event will Fishman, Block + Diamond, or its partners, employees, or agents, be liable to you or anyone else for any decision made or action taken in reliance on the information in this website or for any consequential, special, or similar damages, even if advised of the possibility of such damages.