From the May 2009 issue of Boomer Market Advisor • Subscribe!

Death and taxes: Control what you can

The repeal of the estate tax is ready to sunset, and it's doubtful the Obama administration will have it rise again. This means a readjustment to 2002 rates following the 2010 fiscal year. Few are happy about, but rather than complain, have your clients control what they can. It begins with a comprehensive review of exactly where they are in the estate planning process. The following is a checklist of items needed, courtesy of our friends at Northern Trust (more can be found at You'd be wise to show it to you boomer clients long before the repeal happens:

  • List all client assets and liabilities accurately. Include regular payment dates and amounts due.
  • Provide complete information about assets other than cash or securities (real estate, automobiles and boats are examples). Indicate whether these assets are in your client's name only or if they are owned jointly with their spouse or another individual. Also, be sure to include the location - especially out of state - of each asset.
  • Indicate names, ages and addresses of family members or friends your client intends to name as beneficiaries.
  • If your client currently has a will on file with an attorney or financial institution, get a copy of the document.
  • Include explanations, current balances and projections (if available) of all employee benefit plan entitlements such as 401(k) plans and individual retirement accounts, as well as the beneficiary designations of the plans.
  • Have the client provide copies of any gift tax forms previously filed.
  • Provide copies of any important documents, particularly those relating to divorce, annulment, separation or adoption. Don't overlook deeds of ownership for real estate. If possible, have your client outline how they want their property to pass in each of the following situations: they predecease a spouse; a spouse predeceases the client; one or moreof the client's children predecease them; the client predeceases a parent or other older relative who may not remain financially independent.
  • Have your clients consider how they would respond to the following questions: In the event you and your spouse die at the same time (in a common accident, for example), at what ages would you want property to be available to your children without restriction? At this time, should the need arise, whom would you wish to be designated as guardians of your children? If your chosen guardian(s) become unable to care for your children, whom would you want to succeed them?
  • List all charitable organizations (including schools and universities) you expect to mention in your estate plan and the type or amount of property you intend them to receive.
  • Specifically list items of personal property you want particular individuals to have upon your death if you predecease your spouse, and what other dispositions you would make if your spouse predeceases you. Don't underestimate the importance of this step. It can be a mistake to assume that people will simply "work things through" on their own. Often it's helpful to discuss openly with family members and close friends your desire for them to have items of sentimental as well as monetary value.
  • Think about who you might appoint as executor of your estate. This is an important decision, since the executor is responsible for distributing your assets in the way you specify. The most obvious choice for many individuals is the spouse or oldest child, but you may wish to ask your attorney to explain other options.

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