A Publication of WTVP

An unplanned estate or an outdated estate plan can be costly. If you don’t have an estate plan, state law dictates how your assets will be distributed upon your death. Not surprisingly, there won’t be many tax-saving or wealth preservation opportunities. Even if you have an estate plan, if it hasn’t been updated in several years to address changed circumstances, your family could still incur unnecessary costs. Many factors can affect an estate plan, but the following items should receive specific attention when you review or prepare your estate plan:

Growing Net Worth

Securities and other investments, retirement plan assets and your home, business and life insurance policies are all generally considered part of your estate. Investment gains and increasing real estate values may have helped move your estate into federal estate tax territory. Also, individual states may levy estate taxes of their own; check the laws of your state and consult your tax advisor for additional information.

Estate Taxes

You can leave up to $2 million to your descendants free of federal estate tax for the years 2006 through 2008. This amount will increase to $3.5 million in 2009. In 2010, federal estate taxes are scheduled to be repealed. However, unless additional legislation is passed, federal estate taxes will return in 2011 for estates valued at $1 million or more. The uncertainty of the current estate tax system makes planning your estate more important than ever.

New Address

If you’ve moved to or acquired a second home or property in a different state, your legal domicile may be uncertain. Without clearly establishing your domicile in a single state, more than one jurisdiction may successfully tax your estate. A revised estate plan can help protect your assets against this possible double taxation.

Life-Changing Events

Changes within your family (e.g., marriage, remarriage, divorce, birth, death, etc.) often necessitate changes to your estate plan. Any such changes to your family members should be reflected in your estate plan.

Health Needs

Special health needs may have arisen within your family since your last estate plan review. These may require additional provisions to your will or the establishment of a trust.

Disability Protection

Disability doesn’t only happen to other people. A personal trust can be drafted to help prevent a temporary or permanent disability from disrupting your financial affairs.

Business Changes

Reviewing your estate plan can help alert you to potential disruptions to or tax implications involving your family business. However your business is structured (i.e., as a sole proprietorship, partnership, closely-held corporation, etc.), planning your estate and succession planning for your business should be closely linked.

Philanthropic Intentions

A growing personal estate may encourage you to give more to charity. There are various philanthropic alternatives available to you, including ones which maximize your control over your charitable gifts while still potentially providing you with significant tax savings and other financial benefits.

You’ve probably spent years building up an estate for your family. Having in place an estate plan which helps protect and safeguard your assets makes perfect sense. Adding estate planning to your list of priorities can add to your peace of mind and help spare your family from future estate tax problems. IBI