Post-Death Estate Planning

Most clients focus on pre-death plans during the estate planning process, but clients might want to focus on post-death planning as well. Financial Planning Magazine recently listed several post-death plans clients may want to consider:

1. Non-Tax Decisions

• The state that the client legally lived in at death is important because it determines which laws govern the estate and if state estate tax will be owed.
• Analyze the financial needs of beneficiaries when deciding which assets to distribute to which trust or beneficiary.
• Make careful decisions on what assets to sell and when to sell them.
• Consider disclaimer decisions.

2. Funding Trusts

• Fund a bypass or credit shelter trust.
• With disclaimer bypass trusts, consider how much the surviving spouse should receive outright and how much the spouse will disclaim to pass on to a trust.

3. Deferring Estate Taxes

• Sometimes it is difficult to pay the estate tax within nine months of death as required.
• Consider two post-death options that may be available – (1) The IRS might grant an extension, or (2) the estate tax might be deferred or paid in two to ten installments.

4. Valuing Estate Assets

• Consider the affects of the alternate valuation date.
• Be cautious about valuing assets in a post-death sale.

See Martin Shenkman, After Death Do We Plan, Financial Planning, July 1, 2011. 

Special thanks to Jim Hillhouse (WealthCounsel) for bringing this article to my attention.