Estate Planning is Risky Business, What Should you do?

The future is uncertain and likewise estate planning is uncertain and fraught with unseen perils and risks. Investment returns are not guaranteed, interest rates are unquestionably going to change, and some techniques are dependent on when you die, and of course, tax laws change all too often.

The only thing that is guaranteed is that nothing is guaranteed. Estate plans need regular maintenance and check up as these alterations may demand tweaks to remain optimal. Here are a few tips to assist in mitigating risks:

• Creating a collaborative team of financial advisors, tax professionals, and estate planners will help identify more issues with your plan, as identifying issues is the first step in resolving them.
• Get life insurance! A policy can offset several different contingencies in your plan in case tax laws dramatically change, step up basis for assets transferred to certain trusts, and other risky situations.
• Pay attention to the formalities and minutia of certain paperwork, and if you are not an expert – get an expert.
• Use an institutional trustee instead of a family member or friend. The advantages of the policies and procedures of independent trustees greatly outweigh the financial aspect of paying them.
• Establish trusts in jurisdictions that have amicable laws for them. Using these jurisdictions might reduce some of the legal, tax and other risks your planning is exposed to.
• Like a cake, add layers upon layers to the estate plan. If asset protection is a concern, layer insurance, and umbrella policies to serve as a line of defense before trusts become involved.

See Martin Shenkman, Estate Planning is Risky Business, What Should you do?, Forbes, March 21, 2019.

Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.