Estate Planning New Year’s Resolutions: Resolve To Plan Better

Many people are determined to abide by their New Year’s resolution, whether it be working out, sticking to a diet, or generally being a better person. But there is one resolution that person should stick to – plan better for the future.

• Resolve to plan before the election. If the Democratic party gains enough traction, whether it be in the Senate or in the Oval Office, a severe estate tax bill may be coming. Meet with an estate planning professional to make sure your assets are safe, just in case
• Resolve not to repeat the biggest 2012 planning mistake. In the last year of uncertainty, many people transferred large assets into irrevocable trusts and then immediately had a decent amount of remorse. There are other tools that estate planners possess that can get assets out of your estate that will not cause buyer’s remorse.
• Resolve to evaluate all existing life insurance trusts. Currently, the annual exclusion gift amount is $15,000 per donee, but depending on the election results, that may change to $20,000 per donor. If the $20,000 cap is enacted, you might have difficulty funding your life insurance premiums by gifts to the trust. 
• Resolve to review appreciated assets inside every grantor revocable trust. Given the run-up in the stock market over the past decade, if you have not recently reviewed appreciated assets inside your trust, you should to avoid your estate obtaining a step-up in the income basis of those assets.
• Resolve to review tax reimbursement clauses (or not) in your revocable grantor trusts.
• Resolve to talk to your entire planning team about the secure act.
• Resolve to fund your trusts.
• Resolve to revise your documents, including power of attorney.

See Martin Shenkman, Estate Planning New Year’s Resolutions: Resolve To Plan Better, Forbes, January 1, 2020.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.