Lots of things have changed over the years. Yes, again, I am a master of the obvious.
This certainly is true when it comes to estate planning.
This was the theme of a recent article in The (Anderson, IN) Herald Bulletin titled "Changes in laws can affect your estate planning."
The article explains the basics regarding how revocable grantor trusts are created to help folks avoid probate and how they work.
For example, the three parties to every revocable grantor trust are the grantor (the person creating the trust, also known as a trustmaker, settlor or trustor), the trustee who manages the assets held in trust (typically the grantor), the lifetime income/principal beneficiary (also usually the grantor), and the remainder beneficiary (those who inherit after the grantor/trustee/beneficiary dies).
When assets are placed in a trust ("funding the trust"), the grantor/trustee/beneficiary has control and the use of the trust assets.
Ownership is structured so that there is no probate required to manage or distribute trust assets should the grantor/trustee/beneficiary become incapacitated or upon his or her death.
As a result, grantors should fund the trust with all of their assets with the exception of IRAs and retirement accounts.
Under previous laws, separate trusts were oftentimes created for a married couple and considerable time would be spent determining how to split the couples' assets between the two trusts.
Because, under the laws at that time, when the first spouse passed the survivor would be able to only use the unified credit available to the assets of the deceased spouse to avoid death tax liability.
Again, technically speaking, to avoid probate and minimize estate taxation spouses would have to create two trusts—both revocable—and when one spouse passed, that trust would become irrevocable.
Thereafter, all of the income would be paid to the surviving spouse along with discretionary principal.
Any trust assets remaining at the death of the surviving spouse would pass to remainder beneficiaries.
That, however, was then.
This is now.
A recent tax law change provides for the "portability" of the unified credit of the deceased spouse ... without the creation of a separate trust.
Oh, by the way, the death tax only impacts estates worth more than $5.34 million for singles and $10.86 million for married couples.
That kind of puts things in perspective, yes?
Consequently, this tax law change makes it imperative that married couples re-examine their separate trusts and perhaps even consider funding a single trust for both of them together.
The original article acknowledges that we all like to compartmentalize decisions.
I mean who really wants to think about estate planning, if given the option to do anything else?
I get that.
Nevertheless, you need not go down that road alone.
Contact an experienced estate planning attorney first to see if your estate plan needs to be updated.
So, how do you find an "experienced" estate planning attorney?
First, ask around. Friends, family and other professional advisors are trustworthy sources.
Second, conduct an "organic" search on "Google" for "estate planning" near you (e.g., "estate planning Overland Park KS".
Third, either way, verify. Check out the education, experience, ratings and client reviews of any attorney before you contact him or her.
In fact, I use both of these services to thoroughly vett attorneys before referring members of our "client" family for legal help.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
Reference: The (Anderson, IN) Herald Bulletin (July 10, 2015) "Changes in laws can affect your estate planning."