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Financial Planning > Trusts and Estates > Estate Planning

What’s the point of having or updating your estate plan?

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Estate planning has less to do with taxes and more to do with making sure your wishes are known and honored. Especially if you have an existing estate plan yet have not incorporated life changes into your plan, it may be time to visit with your trusted adviser to discuss changes such as:

    • Family changes
    • Business changes
    • Needs and interest change

If any life events have occurred since you created your estate plan incorporating those changes has a direct impact on the effectiveness of your estate plan and how that plan will carry out you’re wishes for and with your heirs.

If life events have occurred it may be important to review things like;

    • Existing plans with formulas tied to estate tax exclusion amount
    • Are you giving too much to the kids?
    • Are you giving too much to the spouse?
    • Are you giving enough to charity?

Once you identify issues in your current estate plan you might need to seek your advisors council on issues like;

    • Is your plan flexible enough for the surviving spouse
    • Would a disclaimer trust plan better allow a surviving spouse to decide if and how to fund trusts at the death of the first spouse
    • Powers of appointment allow surviving spouse to change disposition of trusts established at first spouse’s death
    • What trust protectors should be used

If gifting will be part of your estate plan you might want to make sure your estate plan is up to date on issues like;

    • FLPs and the accompanying discounts
    • $14,000 2014 annual gift exemption
    • Can accelerated gifts using lifetime gift exclusion

There are other reasons to have an up to date estate plan, maybe with a trust provision. Would your surviving spouse and/or beneficiaries of your estate benefit from;

    • Trust planning at the death of the first spouse using a Credit Shelter Trust/Martial Trust vs the “I Love You will”
    • Trust protects assets from:
      1. Future “new” spouse
      2. Creditors of surviving spouse
      3. Changes in tax law
    • Trust for kids:
      1. Protects assets from kids’ creditors
      2. Protects assets from kids’ soon to be ex-spouse
      3. Protects assets from kids’ dependencies and addictions
      4. Allows for Special Needs planning for kids and grandkids
    • Special Needs Trust:
      1. Number of people eligible for medical assistance programs continues to climb
      2. If assets are held by the individual, they must be spent down before eligible for assistance
      3. If assets are held in a Special Needs Trust, trust assets are exempt and protected
    • State Estate Taxes – some states have “de-coupled “ from the federal estate tax
    • Business Planning issues to be address such as succession planning such as:
      1. Will the kids take over?
      2. Do they want to take over?
      3. Are they capable of taking over?
      4. Lock up Key Employees
    • May include buy-sell agreements in estate plan:
      1. Triggering events: death, disability, retirement, burn out, insolvency
      2. How to determine price:
      3. Valuation
      4. Formula
      5. Agreed upon value
      6. Funding issues: insurance, payments over time, etc.

The best way to predict the future is to create it so create a plan for your future, update your estate plan on a regular basis, and seek the advice and council of your trusted advisor and your attorney. 


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