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Estate Planning Blog

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Is Estate Planning for Everyone?

What Do You Do If Elderly Family Member Is Being Financially Abused?

Financial elder abuse is when a family member, caregiver, or another individual illegally or improperly uses an elderly person’s assets for their own personal gain without the knowledge or understanding of the elderly person. A recent article from The Sun Times News, “Elder Financial Abuse Can Be A Family Affair,” notes the coming “Great Wealth Transfer” of Baby Boomer assets could lead to a dramatic increase in elder financial abuse.

Even minor memory loss can be exploited by scammers and, sadly, family members. With nearly seven million Americans having moderate cognitive issues, the possibility of financial abuse is growing. Boomers live longer than any previous generation, translating into huge healthcare costs in post-retirement years. At the same time, their children and grandchildren face challenges, including student debt and high homebuying costs. The combination of these issues isn’t pretty.

A contributing factor is the increased misinformation about Medicaid, wills, trusts, guardianship and power of attorney. When seniors make their wishes known and formalize them through an estate plan and trusts to protect their assets, the chances of them becoming victims of exploitation can be minimized.

In many cases, isolation leads to vulnerability. One woman allowed her son’s ex-wife to move into her Colorado home to live with her elderly mother. The ex-wife fell victim to scammers herself and convinced the elderly mother to send two checks totaling $70,000 to two scammers, one claiming to be running a children’s mission in Nigeria and another rescuing animals in Malaysia. The elderly woman’s bank didn’t question the large checks, which it should have. The ex-wife also forged checks worth more than $10,000 on the elderly woman’s account. The promised caregiving never happened, and while the woman was arrested and prosecuted, the family will never recover the money as the ex-wife is unemployable—she was a bookkeeper.

The National Center on Elder Abuse suggests only one in 24 cases of elder abuse is reported to authorities. If abuse of any kind is suspected, it should be reported immediately to the police in the jurisdiction where the senior lives. Financial statements, bank statements, credit card bills, canceled checks and evidence must be provided. Even if you don’t have evidence, suspected abuse should be reported.

Families can be torn apart when heirs battle over inheritances. Two means of prevention are creating an estate plan by an experienced estate planning attorney, with trusted family members or professionals to serve as Power of Attorney and executor. The second is to maintain ongoing contact with the senior, if possible, in person and, if not, via phone calls, video calls and visits. The more involved you are with an aging person’s life, the better your chances of uncovering or preventing financial elder abuse.

Reference: The Sun Times News (May 8, 2024) “Elder Financial Abuse Can Be A Family Affair”

Retirement Planning

Who Gets Access to Your Digital Assets Account When You Die?

With so much of our lives now lived online, it’s hard to remember how we lived in a world without email, internet, or mobile phones. However, the question of what happens to our online lives after we die becomes a challenge for loved ones, says a recent article, “One day you’ll leave this earth, but your data will live on in a messy future” from WFIN.COM. Few people 65 and older have a digital estate plan, meaning the next generation must clean up what’s left behind.

Let’s start by defining digital assets and digital legacy. Digital assets are anything in digital format, including photos, videos, emails, social media account content, websites and cryptocurrency. A digital legacy is all the digital assets left behind when someone passes.

A digital legacy may include personal, financial and creative digital property. For instance, if you’re a prolific blogger, you own intellectual property. What do you want to have happen to your blogs after you’ve died? Or, if you have a craft business on Etsy, who will manage it?

Digital assets don’t disappear when you become incapacitated or die. They live on unless someone has been designated as a digital executor and there is a plan to manage the assets. What happens also depends upon the platform’s privacy and legacy policies. In some cases, accounts and their contents are deleted after a certain period of inactivity.

What happens if no digital estate planning takes place?

  • Online financial assets, including bank accounts and cryptocurrency, have economic value your executor needs to be able to access and manage. If they can’t locate a username and password or are stymied by third-party verification like facial recognition, gaining access to your assets will take a long time.
  • If you’re among the millions who enjoy creating a family history with genealogy websites, years of work you may have wanted to pass to the next generation may become inaccessible or vanish.
  • Identity theft and fraud are common occurrences when digital assets are not managed or deleted after the original owner dies.
  • Some platforms allow users to name a legacy contact who can access their accounts, gather and download content and close accounts. You’ll need to review your social accounts to determine what each platform permits and set up legacy or memory accounts.

A digital executor doesn’t always need passwords and usernames to delete, memorialize, or close your accounts. However, they will still need an inventory of your accounts and a clear directive explaining what you want to happen to your assets after your passing. Password sharing, while common, is not legal. Most states have passed some version of the RUFADAA—Revised Uniform Fiduciary Access to Digital Assets Act. Talk to your estate planning attorney about incorporating digital estate planning into your estate plan.

As a side note, if gathering your account information seems overly burdensome, imagine what would happen if your executor, already busy with so many tasks, needed to become a digital sleuth to determine what assets you have and how to access them.

Reference: WFIN.COM (May 11, 2024) “One day you’ll leave this earth, but your data will live on in a messy future”

estate planning

Another Lesson in Updating Beneficiary Designations

If you’re among the many who have IRAs, 401(k)s and other retirement accounts with beneficiary designations, now is the time to ensure they have been updated to reflect your current wishes. This is the vital lesson sent by a federal court case described in the article “Court Backs 401(k) Beneficiary Designation in Estate Claim” from the National Association of Plan Advisors.

Jeffrey Rolison worked for Proctor & Gamble for many years. When he enrolled in the company’s 401(k) plan, he named his then-girlfriend, whom he lived with, as the sole beneficiary of his 401(k). The couple broke up in 1989—just two years after he had enrolled in the 401(k) plan.

Over the years, the account grew to $754,000. However, Rolison never changed the beneficiary. According to the court decision, The Proctor & Gamble U.S. Business Services Co. et al. v. Estate of Jeffrey Rolison et al., heard in the U.S. District Court for the Middle District of Pennsylvania, P&G notified Rolison many times over the years of his ability to change the beneficiary designation. The option was sent by mail in the earlier years of his enrollment, and as time passed, it became an option he could have taken care of online.

The court said he was given notice and direction but never changed his beneficiary. Estate planning attorneys reading this already know the outcome. However, the estate devoted countless years and resources to battling this issue, with many motions for summary judgment, a denied motion for certification to appeal and many, many motions for reconsideration.

The judge in the case for summary judgment, where the court decides without going to trial, explained the party seeking summary judgment is responsible for informing the court of the reason for its request and demonstrating the absence of a genuine dispute of fact. The court said it failed to do so.

Rolison’s estate claimed that Proctor & Gamble violated its fiduciary duty under ERISA (a federal law governing employee benefits) by not disclosing material information to Rolison. The estate said P&G should have told him who his designated beneficiary was, not just his option to make a change. The argument was that the company only provides “generic beneficiary information” to employees and doesn’t inform them of their “specific beneficiary status.”

Proctor & Gamble argued that the Court had, in previous decisions, determined that the company had fulfilled all disclosure requirements. The estate didn’t disprove that P&G informed Rolison and all employees how to change their beneficiary designations. The judge agreed.

The court said Rolison had been informed of his options over the course of thirteen years. If he didn’t go online to add a designation, the paper beneficiary designation would stand.

Although the relationship had ended two decades earlier, Rolison had such a large account that he didn’t update his beneficiary designation. Was this what he intended? It’s possible, but it stands as a strong example of why beneficiary designations need to be updated: to ensure that assets pass to the right person and to prevent an estate from being depleted by long, costly litigation.

Any time you meet with your estate planning attorney to update your estate plan should be a reminder to update beneficiary designations. However, if you haven’t reviewed these accounts in years, review them immediately.

Reference: National Association of Plan Advisors (May 6, 2024) “Court Backs 401(k) Beneficiary Designation in Estate Claim”

personal injury

What Happens When Executors Keep Beneficiaries in the Dark?

A couple who never had children created a will, leaving their six nieces and nephews equal shares of their estate upon their deaths. When the uncle died, the aunt remarried years later but never changed the will, except for giving her second husband a life tenancy in the family home. A recent article from Market Watch asks if what happened next is right: “My late aunt gave her husband a life tenancy in her home—but her attorney won’t even let us see the will. Is this a bad sign?”

The problems began when the aunt’s attorney told the nieces and nephews that they were responsible for the taxes and property insurance while the life tenant lived in the home. The nieces and nephews had never seen a copy of the will, so they are unsure of their responsibilities as remaindermen. Nothing in the estate needed to go through probate, so the aunt’s will was not available to beneficiaries through the county court.

This case illustrates several important estate planning points. First, an executor of a will (or an administrator of an estate) is required to keep beneficiaries “reasonably informed” of the will’s contents after probate. It seems reasonable for the nieces and nephews to be able to see the will.

In most cases, the person given the life tenancy is responsible for paying taxes and property insurance and for the general upkeep of the residence. Any other arrangement is unusual, so the nieces and nephews are right to want to see the will.

The life tenant has rights, including the ability to rent out the property. However, they can’t do anything to decrease the house’s value. It’s important to know that elderly people may be unable to apply for Medicaid because they live in the house this way.

If it has been months since the person died and there hasn’t been any communication from the executor, a few different scenarios are possible. It may be that the executor doesn’t know they are required to keep beneficiaries informed. However, it’s also possible that the executor is engaging in illegal behavior.

In most states, the executor is responsible for providing beneficiaries with a complete inventory and appraisal of all the estate’s assets. Depending on the state, probating an estate may take more than six months, and creditors have a certain number of months to file a claim.

Suppose the beneficiaries wish to replace the executor. In that case, they can do so by speaking with an estate planning attorney and being prepared to go to court and prove the executor is either self-dealing, incompetent or has a conflict of interest.

However, once the will is probated, it will become part of the public record and must be filed in probate court. Depending on the jurisdiction, the court will give the beneficiaries the right to access the will.

The best option for the nieces and nephews is to consult an estate planning attorney to explore their options. If they live in a different state, a local estate planning attorney can recommend someone in their aunt’s jurisdiction to help.

Reference: Market Watch (April 28, 2024) “My late aunt gave her husband a life tenancy in her home—but her attorney won’t even let us see the will. Is this a bad sign?”


Elvis Presley’s Estate Planning Mistakes: Lessons for Us All

Even the King of Rock ‘n’ Roll wasn’t immune to estate planning mistakes. Elvis Presley passed away in 1977 with a net worth of around $5 million. Nevertheless, poor estate planning resulted in significant financial challenges for his daughter, Lisa Marie Presley, who inherited the estate at age 25. Unfortunately, the saga of estate mismanagement continued with Lisa Marie’s untimely death in January 2023. This article examines the lessons we can learn from these oversights.

Why Did Elvis’s Estate Plan Fail?

Over-Reliance on a Will

Elvis relied on a basic will instead of a more comprehensive estate plan, such as a trust. While wills provide instructions for asset distribution, they don’t protect beneficiaries from probate. This led to significant legal costs and delays, reducing the estate’s value. Furthermore, only a fraction of his estate remained after creditors, unscrupulous business partners and the IRS took their share. Kiplinger details how these mistakes haunted his daughter, Lisa Marie Presley.

Excessive Spending

Elvis was generous and free spending. However, his estate planning didn’t account for this. As a result, much of his inheritance went to creditors rather than his daughter. However, creditors weren’t the only ones claiming what Elvis left behind. The most significant loss was to the IRS, which claimed that the estate tax was worth double the value of Elvis’ estate.

Trusting the Wrong People

Elvis trusted Thomas Parker, better known as Colonel Parker, with business management.  However, Parker was a Dutch illegal immigrant with a history of mental instability. The Army discharged him following a “psychotic breakdown,” and he had only served as a private. Parker’s business deal entitled him to 50% of Elvis’ profits and enabled him to sell Elvis’ song catalog. He kept most of the profits, depriving the family of any royalties.

Lack of Estate Planning

Between the IRS, creditors and Parker, the woes Elvis left his loved ones have one thing in common: They were avoidable estate planning mistakes. While few people trust their will to Colonel Parker, many leave behind a will that doesn’t protect their loved ones. Advanced estate planning strategies, such as the creation of trusts, are much more reliable than a simple will.

Can You Avoid Similar Estate Planning Mistakes?

A will is better than nothing, but it’s only the start. Develop a comprehensive estate plan that includes a trust and a power of attorney, and follow these steps:

  • Plan for Estate Taxes: Many ways exist to reduce estate taxes. Consider strategies like gifting assets and establishing trusts.
  • Maintain Liquidity: Set aside liquid assets to cover immediate family needs and creditor expenses.
  • Regularly Review and Update Plans: Life changes, and your estate plan should too. Ensure that your estate is set up to provide your loved ones with what you wish for them.
  • Consult with a Reputable Estate Advisor: Estate law is complex. Consulting with an estate planning professional can help you avoid Elvis’ mistakes.

Take Action to Avoid Estate Planning Mistakes

Don’t let your loved ones face unnecessary financial difficulties. Develop a comprehensive estate plan with the help of our estate planning attorneys.

Key Takeaways

  • Elvis Presley’s Estate Planning Mistakes: Elvis relied on a basic will and trusted people he shouldn’t. Consequently, his wife Priscilla and his daughter Lisa Marie Presley only received a fraction of his estate. If the King of Rock ‘N Roll needed a thorough estate plan, we all do.
  • Avoid Estate Planning Pitfalls: A comprehensive plan centered on trusts to protect your loved ones avoids many common mistakes.
  • Contact a Trustworthy Professional: Elvis’ business partners sold many of his assets for personal benefit. Rely on a reputable estate planning attorney to give your family the best opportunities.

Reference: Kiplinger (May 17, 2023) “Five Estate Planning Lessons We Can Learn From Elvis’ Mistakes”

For Business Owners: Unveiling Opportunities and Pitfalls of Business Trusts

Entrepreneurs often seek robust mechanisms to safeguard assets and navigate liability in the intricate landscape of business ownership. Enter the realm of business trusts—a lesser-known yet powerful tool entrepreneurs can leverage to secure their ventures. Based on SmartAsset’s article, What Is a Business Trust and How Does It Work, we’ll look into the intricacies of business trusts, uncovering their nuances and exploring their potential advantages and drawbacks.

Decoding Business Trusts: A Primer

At the heart of business trusts lies a fundamental premise: the delegation of authority to manage a beneficiary stake in a business. Functionally akin to individual or family trusts, business trusts serve as legal instruments facilitating asset management on behalf of the grantor.

A business trust holds the rights to an individual’s stake in a business entity. In a sense, the trust, as a legal entity, owns the business. With the potential to shield against taxes and liability, business trusts offer a compelling avenue for entrepreneurs seeking robust asset protection.

Understanding the Mechanics: How Business Trusts Operate

Creating a business trust typically starts with deliberations between involved parties and a trust lawyer. This legal instrument, a declaration of trust, formalizes the terms governing the trust’s operation.

Central to the trust’s dynamics is the fiduciary duty entrusted to the trustee—the individual responsible for managing the trust’s assets in the best interests of beneficiaries. This fiduciary obligation underscores the trustee’s paramount responsibility to act prudently and diligently.

Exploring Business Trust Varieties: A Spectrum of Options

Just as individual trusts come in various forms, business trusts exhibit diversity in structure and function. Here’s a breakdown of the primary categories:

  • Grantor Trust Characterized by the grantor’s control over trust assets and taxation, this trust type offers a self-contained framework for asset management.
  • Simple Trust Operating under IRS verification, this trust directly distributes profits to beneficiaries without accessing principal assets.
  • Complex Trust Offering greater flexibility, this trust type permits partial distribution of profits and contributions to external entities, such as charities.

Pros and Cons of Business Trusts: Weighing the Considerations

While business trusts present enticing benefits—from liability protection to enhanced privacy—they pose certain challenges. Here’s a snapshot of the pros and cons:


  • Liability Protection: Shields beneficiaries from individual liability, akin to LLCs or corporations.
  • Privacy Enhancement: Offers an additional layer of privacy in asset management.
  • Flexible Distribution Terms: Facilitates tailored distribution schedules for beneficiaries.


  • Cost and Complexity: Establishing and maintaining a business trust can be expensive and legally intricate.
  • Legal Compliance Challenges: Navigating legal requirements and compliance hurdles can pose significant obstacles.
  • Lifetime Limitations: Business trusts are typically constrained by a maximum lifespan of 99 years, limiting multi-generational arrangements.

Steps to Establishing a Business Trust

If you’re considering a business trust, the journey begins with competent legal guidance. Collaborate with a trust lawyer to navigate the intricacies of trust creation and ensure alignment with your business goals and objectives.

While establishing a business trust entails upfront costs and legal complexities, the potential benefits of asset protection and operational flexibility can be substantial. Before proceeding, it’s crucial to weigh the key considerations and assess the suitability of a business trust for your unique circumstances.

Business Trusts Key Takeaways:

  • Early Consultation is Key: Engage with a trust lawyer early in the process to navigate legal complexities and ensure alignment with your business objectives.
  • Deliberate Consideration is Essential: Thoroughly assess the pros and cons of a business trust, weighing factors such as cost, complexity, and compliance.
  • Tailored Solutions Yield Optimal Results: Customize your business trust to align with your unique needs, leveraging its flexibility to achieve optimal asset protection and operational efficiency.


Ready to embark on your journey towards enhanced asset protection and operational flexibility? Schedule a consultation with a seasoned trust lawyer today and explore the transformative potential of business trusts.

Reference: SmartAsset (April 19, 2023) “What Is a Business Trust and How Does It Work”

Three Estate Planning Strategies You Might Not Know – but Should – SPATs, SLATs, and DAPTs

In estate planning, where uncertainty seems to be the only certainty, it’s time to adapt and choose flexible strategies so you can walk this changing landscape confidently. This is a different world where individuals don’t just move assets into an irrevocable trust to avoid taxes and sigh with relief. As we age, economic uncertainty and rising costs move the goalposts closer to home. Comprehensive estate plans encompass retirement, advance care planning and Medicaid.

The estate tax exemption, poised to drop significantly in 2026, has estate planning attorneys and their clients considering different approaches to estate planning. Estate planning needs for wealthy individuals and those building a nest egg have evolved from passing on wealth to preserving and accessing wealth retirement through the senior season of life. Referencing Charles Schwab’s article, “Prepare for 2026 Estate Planning With SPATs, SLATs, and DAPTs,” we outline three types of trusts that might be good options in your estate plan.

Trusts, an estate planning staple, have benefits and vulnerabilities if not structured strategically. Adjusting a trust’s provisions to empower trustees with control over distributions protects against creditors or the deceased’s ex-spouse. There are three types of trust you might not be aware of: a Domestic Asset Protection Trust (DAPT), a Special Power of Appointment Trust (SPAT), and a Spousal Lifetime Access Trust (SLAT).

Three Types of Trusts that Add Additional Asset Protection – DAPT, SPAT, and SLAT

Domestic Asset Protection Trust (DAPT)

The Domestic Asset Protection Trust (DAPT) is a self-settled or self-created trust that can name the creator/grantor as beneficiary and an administrative trustee with approval authority. Placing asset distribution decisions in the trustee’s hands provides protection from creditors or litigation.

As with any estate planning option, consider the pros and cons of creating a DAPT. The trust creator or grantor funds the trust but only accesses the assets as the beneficiary, not directly. The administrative trustee controls distributions, while the trust creator is the investment trustee, managing the investments in a DAPT trust.

Special Power of Appointment Trust (SPAT)

Not a self-created trust, the special power of appointment trust’s assets are not vulnerable to creditors or estate expenses. The grantor or person funding the trust is not a trustee or a beneficiary and relies on a trusted individual to distribute funds directly to them later.

Work with an experienced estate planning attorney to discuss the pros and cons of this type of trust. If you don’t need direct access to the funds, a SPAT may align with your asset protection goals.

Spousal Lifetime Access Trust (SLAT)

A Spouse Lifetime Access Trust (SLAT), available in community property states, allows a spouse to establish a trust for the other’s benefit. SLATs are post-marital legal documents that separate community property such as real estate, income, and debt. They can be created by one or both spouses and funded with different assets to remove specific property from one spouse’s estate.

Work with an estate planning attorney if you are interested in a spousal lifetime trust so you don’t run into a reciprocal trust doctrine issue, in which the trusts are too similar and create mutual value, much like the community property they’re trying to avoid.

Customize each trust’s provisions to avoid similarities that make both trusts interrelated or like community property. Each SLAT should differ in trustees, beneficiaries, trust administration rules, gift distributions and withdrawal rights.

Estate Planning Trust Strategies to Know Key Takeaways:

  • Trust Strategies to Know: Consider a DAPT, SPAT, or SLAT in your estate plan.
  • Trust Pros and Cons: Each has benefits and considerations before choosing your trust type.
  • Build Flexibility into Estate Planning: Economic uncertainty and changing needs mean more flexibility in today’s estate planning.


Estate planning today means adding more flexibility in uncertain times. With SPATs, SLATs, and DAPTs, individuals can adapt their estate plans to address goals and economic changes for peace of mind from retirement to senior years.

Reference: Kiplinger (April 12, 2023) “Prepare for 2026 Estate Planning With SPATs, SLATs and DAPTs.”

Why are Retirees Selling Their Forever Homes?

With the residential real estate market at an all-time high, it seems like a no-brainer for retirees to put their homes on the market, capture the equity in their homes and downsize to a less expensive home. Before you call a realtor, there are a number of factors to assess, advises an article from NerdWallet, “Selling Your Home Could Boost Your Nest Egg—But Is It Worth It?”

Selling high is great, especially if you own a home in an expensive area and your plans include a smaller home in a less expensive market or even renting. However, can you afford to purchase a replacement home to suit your current and future needs? A rising tide lifts all ships, and prices for all homes, even modest ones, have risen.

If relocation is on your agenda, a thorough analysis of property taxes and basic costs of living should be part of your planning. While the recent settlement of a class action lawsuit against the National Association of Realtors may mean you’ll spend less on selling and buying a new home, property taxes only go in one direction: up. If purchasing a new home means a new mortgage, interest rates have continued to increase, and for the time being, money is not as cheap as it was a few years ago. A mortgage payment on a smaller house could be the same as the mortgage payment on a larger house purchased before interest rates began rising.

Consider the non-financial aspects of selling your current home to move to another city. For some people, moving to a golf community is a great thing. However, when there is no family nearby, the death of a spouse can mean a return to their previous hometown, regardless of the cost.

The cost of maintaining a pre-retirement home in a region where all the children have left the nest can become overwhelming for fixed-income budgets. An older home will need a new roof, landscaping services and the inevitable replacement of major appliances.

Before you make the final decision, after considering the costs of selling your current home, buying a new one, or living in another community, you may also need to change medical providers. Do your homework to be sure you will be able to receive the same quality of care you require in your new community.

Don’t underestimate the impact of climate in your ideal location. Suppose you’re planning to relocate to Florida or Arizona. In that case, you’ll want to visit for an extended period during the worst seasons, when it’s hot and stormy in Florida and over 110 degrees and dry in Arizona. It’s great to visit Maine or the Upper Peninsula of Michigan in the summer. However, winters there are long and cold. Be realistic about what kind of weather you’ll want to live with as you and your spouse age.

If you move to a new home in a different state, remember to update all estate planning documents with a local estate planning attorney. The rules for many documents, including Power of Attorney, Last Will and Testament, Advanced Care Directive, Healthcare Proxy and others are different from state to state, and a valid will in one state may not be valid in your new state.

Reference: NerdWallet (March 21, 2024) “Selling Your Home Could Boost Your Nest Egg—But Is It Worth It?”

How Parents and Adult Children Talk about Money and Aging

If you thought it was hard to talk with your children about sex, try talking with them about money and death. Americans generally steer clear of talking about death and money. Nevertheless, these conversations are necessary, according to a recent article, “Let’s talk about money and death: Why aging parents and their adult children should have ‘the talk,’” from MarketWatch. Sharing information about finances and end-of-life wishes can prevent resentment or stress before a crisis and gives everyone involved peace of mind.

If an estate plan has been created and financial and tax planning accomplished, but the adult children aren’t told a plan exists, there may be general worry over decades as parents age. What will happen when they die? Will the siblings know what to do? Who will be in charge? A family meeting to discuss the plan and the parents’ wishes can address these issues.

This is especially important for members of Generation X (Americans born between 1965 and 1980). This cohort has the most assets, may deal with a significant wealth transfer and often cares for its children and aging parents.

Start by putting together an agenda for the family meeting. Understand that there may need to be more than one meeting, since there is so much ground to cover. Long-term Care planning, the current status of the parent’s living situation and plans for a possible move to a continuing care facility are just the start. Do the parents have an estate plan and documents like a Power of Attorney, Healthcare Proxy, Advanced Care Directive and the like?

Money can be an emotional conversation, especially if there are disparities in the sibling’s financial status. Parents are often extremely reticent to share information about their net worth, sometimes because they don’t want their children to lose incentive to work, and in other situations because they are embarrassed about not having enough money to sustain them through their later elder years.

Having a neutral third party in the meeting, like an estate planning attorney, can be helpful when emotions are running high. Holding a family meeting in a law office may sound formal. However, having a professional on hand who can clarify estate, financial and tax matters may help keep the conversation focused. If the estate planning attorney works with a therapist or geriatric specialist who facilitates family discussions, they may be able to help the family move past the emotions of anticipated grief into productive, concrete planning.

Confronting the realities of mortality and money is difficult even in the best of circumstances. Nevertheless, with the support of skilled professionals, a focus on care and the creation of a no-judgment zone, the family will be able to help each other as they prepare for the future.

Reference: MarketWatch (March 23, 2024) “Let’s talk about money and death: Why aging parents and their adult children should have ‘the talk’”

Estate Planning has Begun for Exemptions Expirations

The high lifetime estate and gift tax exemptions gave extremely wealthy Americans terrific tax breaks. In 2024, exemptions are currently at $13.61 million per person and $27.22 million for married couples.  However, the end of these levels means that taxpayers with wealth of a much lower magnitude will need to prepare, according to a recent article from Forbes, “Wealthy Families: Consider These Planning Ideas Before ‘The Sunset.’”

Some state estate taxes are tied to federal estate taxes, so people of modest wealth should check with their estate planning attorney to be sure they are properly situated before the law changes. In addition, several strategies can be considered and applied to many tax brackets.

Charitable Giving. Instead of making a gift through a trust, you might consider donating cash to a charity. Under the 2017 law, the deductions for direct cash contributions jumped from 50% of AGI to 60%, including gifts to Donor-Advised Funds (DAFs). When the exemptions end, the limit will return to 50%, so if you are charitably inclined, making a cash gift now is a good idea.

Strategic Gifting. Assets depressed in value may have tax value as gifts. You might gift them to a beneficiary or a trust, so their appreciation may occur after they have been removed from your taxable estate. This creates two wins: the depressed assets will use less of your lifetime estate and gift tax exemption, and their future growth and possible increase in value will take place outside of the taxable estate.

“Substitution Powers” Assets. If you have transferred assets to grantor trusts with retained “substitution powers,” consider moving low-basis assets out of trusts at a lower current value in exchange for higher-basis assets of equivalent value. This strategy could lessen capital gains on the lower-basis assets by returning them to the taxable estate and benefit from the step-up in basis at death. Talk with your estate planning attorney about how this might work for you.

Business Owner Planning. The Qualified Business Income (QBI) tax deduction created by the Tax Cuts and Jobs Act allows select pass-through entities, like sole proprietorships, partnerships, and S-corp owners, to deduct as much as 20% of business income. There are income thresholds and other limits to consider. However, this tax deduction ends on December 31, 2025. Accelerating income now could be of great value for business owners who qualify.

Basic Income Tax Planning. Income tax brackets will return to their levels before the TCJA law was enacted. The top bracket may increase to 39.6%, so you may not want to defer income. Middle tax brackets are also expected to expand.

Alternative Minimum Tax and Incentive Stock Options. The exemption amount for the AMT increased under the TCJ. However, this will also return to previous levels, making more taxpayers vulnerable to the AMT. One workaround is to exercise incentive stock options, which aren’t considered income for regular tax purposes but are considered income for AMT taxes. The AMT could be due in the year of exercise. If you can exercise before 2026, it could be a tax-savvy move.

Estate Planning Strategies. Planning needs to be flexible, since there is no way to know if Congress will or won’t act to renew TCJA. It may seem like there’s time to make any necessary changes. However, it takes time to create and execute a plan, which is why wealthy families are acting now to protect their assets.

Reference: Forbes (March 6, 2024) “Wealthy Families: Consider These Planning Ideas Before ‘The Sunset’”