Notes - The Wall Street Journal Complete Estate-Planning Guidebook

July 6, 2024

Chapter 1: Getting Started

This chapter covers the initial steps before drafting a will or trust. This includes identifying estate-planning goals, inventorying possessions, discussing plans with family, and selecting appropriate legal counsel and advisors.

Estate-Planning Essentials

Everyone should have a will, power of attorney for finances and health care, a living will, and guardianship designation. It is important to keep these documents updated, reflecting current finances and family situations. Trusts are useful tools, but they might not be suitable for everyone. Revocable living trusts help to avoid probate or to manage property. Other types of trusts are more appropriate if an estate is taxable or if there are young children.

Unmarried couples should consider writing wills, as state laws do not automatically grant rights to partners. Without a will, a surviving partner may not inherit anything, including a shared home.

Estate Planning Goals

Estate planning benefits both children and parents and honors family wishes. This process can also reduce conflict and disorganization for the family later. Estate planning is not only for senior citizens. Key documents are important no matter how old a person is.

Questions to consider:

• Who should receive property?
• How much should each person inherit?
• Are there sufficient funds for retirement?
• Should any charitable bequests be made?
• What assets and liabilities are there?
• Is the estate taxable?
• Who should be the guardian for minor children?
• Who should handle finances if the owner of the estate becomes incapacitated?
• Who should handle medical affairs if the owner of the estate becomes incapacitated?
• Who should be the executor of the estate or the trustee of any trusts?
• Should specific objects or heirlooms go to certain people?
• Are there specific wishes for end-of-life care or incapacitation?
• How should estate-planning, financial, and medical documents be stored?
• How do life insurance policies and retirement plans fit into the estate plan?
• Should any other advisors be consulted?

Write down the answers to these questions along with any special issues to be addressed by the estate plan and bring this when meeting with a lawyer or estate planner.

Family Discussions

Open and honest conversations with family and loved ones can minimize conflict and help ensure wishes are carried out. It can also reveal any potential disagreements and allow time to work through them.

Talking to family members

Start the conversation casually. For example, mention reading a book about estate planning and suggest that the family member consider it too.

Talk about general family goals and values. This might include supporting a charity, saving for college and retirement, and fostering independence for children and grandchildren. Frame estate planning as a way to achieve these goals. Highlight how disorganization can cause time-consuming conflict.

Let family members know that understanding their wishes is important to make sure those wishes are carried out. Ask them if they have any special requests.

Ask "what if" questions, like, "What would you want to happen to the things in this house if you and Mom couldn't live here anymore?"

For parents talking to children, individual discussions might be more effective to ensure each child feels comfortable expressing their opinion. Parents can then reflect on the information and see if there are any potential conflicts.

A family meeting at a relaxing location can also help facilitate discussion. A lawyer or accountant may be a helpful neutral third party to moderate the conversation and address tough topics. Decide beforehand whether or not to include spouses of adult children.

All participants should come prepared with a list of questions and concerns. This may include access to important documents and opinions about end-of-life care. Siblings may want to collaborate on questions and topics beforehand.

Avoid having these conversations during stressful times, such as after a death or during family gatherings. If a meeting is not working, try a relaxing activity like golf or walking.

Dealing with reluctance or silence

Some family members may be reluctant to participate or communicate their feelings. Silence, however, can lead to disaster. Transparency is important to avoid suspicion and conflict.

Listening to family members can help to clarify estate planning goals and reveal issues that may not have been considered before.

Choosing a Lawyer

While software programs are sufficient for straightforward situations, a lawyer can provide specialized strategies and plans tailored to individual circumstances and state laws. They can also testify to the owner's mental capacity if the plan is challenged, ultimately saving time and money.

Finding a Lawyer

• Ask friends, family, and other advisors for recommendations.
• Look for estate planning specialists through organizations like the American Academy of Estate Planning Attorneys and the National Academy of Elder Law Attorneys.
• Consult the yellow pages or online directories, remembering that specialists are preferable to generalists.

Initial Consultation

• Call to inquire about their process and fee structure.
• Clarify all fees, including for emails, phone calls, and photocopies.
• Inquire about the firm's size and expertise, whether it is a large firm or small boutique, and if they only practice estate planning or other areas of law.
• Explain the family's situation concisely and inquire about recommendations and a cost estimate for documents. Ask if the firm has experience with similar situations and whether they share the same values (i.e., Christian estate planning or gay and lesbian estate planning).

It is beneficial to interview multiple lawyers before making a decision.

Taking Stock

Completing the Questionnaire

Lawyers typically provide a questionnaire before the first face-to-face meeting. This questionnaire requires an inventory of the estate to see what it includes.

Inventory

• Income: Employment and investments
• Assets: Bank accounts, investments, CDs, retirement plans, insurance policies, annuities, vehicles, business interests, real estate, art, jewelry, furniture, collectibles, and any intangible property, like patents or intellectual property. Note any expected windfalls or inheritances
• Liabilities: Mortgages, loans, and credit card debt

Property Titles

• How is the property titled?
• Is it in the owner's name, a spouse's name, or jointly owned?

Understanding ownership is crucial to ensure control over assets. The owner's assets are part of their estate. Assets owned by another person or entity, like a spouse or an irrevocable trust, are not considered part of the estate and are not counted towards estate tax. Assets owned jointly with another person have more complex rules.

Other Considerations

• Naming an executor: who will handle the estate after death
• Naming a successor executor: if the first choice is unable to fulfill the role
• Naming a guardian: who will care for any minor children

The completed questionnaire helps the lawyer draft the estate planning documents. Completing this beforehand saves time and money.

Estate Planning If You’re Unmarried

Unmarried couples do not have the same legal protections as married couples. A surviving partner in an unmarried couple may not inherit anything if there is no will.

Key planning steps:

• Write a will. This protects the surviving partner's right to inherit assets.
• Name the partner as a beneficiary on all financial accounts, retirement plans, and life insurance policies.
• Update beneficiary designations regularly to reflect any changes in the relationship.
• Hold property as "joint tenants with rights of survivorship" to ensure automatic transfer of property to the surviving partner in case of death.
• Create a living trust, particularly if you live in a state where probate is lengthy and expensive, naming the partner as the beneficiary.
• Consult a lawyer to understand state laws regarding unmarried couples and inheritance rights, which can vary widely.

Chapter 2: Death and Taxes

This chapter explains how estate, gift, and generation-skipping transfer taxes work and provides some strategies to help minimize them.

Controversy and Complexity

• The estate tax is complex and controversial.
• Critics of the estate tax argue that families should be able to distribute wealth to heirs without the government taking a portion, especially because income may have already been taxed.
• Proponents of the estate tax argue that it helps level the playing field, raises revenue, and prevents the concentration of wealth among a small group of families.
• Regardless of one's position, the estate tax laws will likely continue to change, so estate plans should be flexible.

Calculating Your Estate

• The value of an estate for estate tax purposes is typically assessed on the date of death, but executors and heirs can choose to use the "alternate valuation date" six months after the date of death. This may be beneficial during an economic downturn.

Portability

• The estate tax law allows for portability of the unused estate tax exemption from one spouse to another.
• Portability makes it less necessary for some married couples to use "bypass" or "credit shelter" trusts, but these trusts are still valuable.

Stepping Up

• "Stepping up" is the system for valuing stocks, mutual fund shares, and other inherited property whose value has increased over the years.
• The step-up system adjusts the cost basis to the value of the asset on the date of death, meaning heirs would likely pay very little in capital gains taxes if they sold the inherited assets soon after inheriting them.

State Estate Taxes

• While fewer people are subject to the federal estate tax, some states have their own estate taxes with lower exemption levels, meaning a family may be exempt from federal estate tax but still subject to state estate tax.
• Strategies to save on state estate taxes include:
  • Creating a flexible estate plan.
  • Giving heirs money during your lifetime.
  • Moving to a state with no estate tax.
  • Using a "state qualified terminable interest property trust," or state QTIP trust, if available in your state.

Gift Tax

• The gift tax is a tax on large transfers of assets to other people while you are still alive.
• The annual gift tax exclusion allows you to gift up to $13,000 per year to any number of individuals without those gifts being subject to gift tax.
• Gifts exceeding the annual exclusion are not tax-free but are applied to your lifetime gift tax exemption.
• Benefits of making gifts during your lifetime include:
  • Beneficiaries may need the money more when they are younger.
  • Gifts reduce the size of your estate.
  • Gifts of assets that have gone down in value can appreciate outside of your estate.
• It's important to consider whether you have enough money for retirement, health care, and long-term care before making large gifts.

Family Limited Partnerships

• Family limited partnerships can allow parents to pass large sums of money to their children virtually tax-free, but they have been challenged by the IRS.
• To avoid IRS scrutiny, family limited partnerships should:
  • Have a valid non-tax-related reason to exist.
  • Be set up while you are in good health.
  • Have a separate bank account.
  • Not include personal assets.
  • Not use partnership assets to pay personal expenses.
  • Distribute income to partners according to ownership stake.

Generation-Skipping Transfer Tax

• The generation-skipping transfer tax is levied if you transfer large sums of money to grandchildren or great-grandchildren.

This chapter provides an overview of various taxes related to estate planning and highlights some strategies to potentially minimize those taxes. Please note that tax laws are complex and constantly changing, so it's essential to consult with a qualified estate-planning professional for advice tailored to your specific situation.

Chapter 3: Wills: Passing On Your Property

This chapter of The Wall Street Journal Complete Estate-Planning Guidebook explains the importance of wills in an estate plan and how to draft one to ensure your money and belongings are distributed as you choose.

Why a Will Is Important

• A will is the centerpiece of most estate plans, allowing you to control how your assets and property are distributed after you die.
• If you die without a will (intestate), state law dictates the distribution of your assets, which may not align with your wishes.
• A will allows you to:
  • Name guardians for your minor children.
  • Set up testamentary trusts.
  • Name an executor.

Drafting Your Will

You should consider the following when drafting your will:

• Beneficiaries: Who should receive your property? Should they receive it outright or in trust?
• Distribution: Should your property be distributed equally among your children or other heirs?
• Specific Bequests: Are there tangible items (jewelry, paintings) that you want to go to specific family members?
• Family Heirlooms: Are there heirlooms or a family home that you don't want sold?
• Executor: Who should be the executor of your will?
• Guardians: Who should be the guardians for your minor children?

Basic Guidelines for Drafting a Will:

• Identify Yourself: Clearly state your full legal name as the creator of the will.
• Revoke Previous Wills: State that this will voids any previous wills.
• Format: The will should be typed and printed, not handwritten.
• Signature and Date: Sign and date the will in the presence of witnesses.
• Witnessing Requirements: Familiarize yourself with your state's witnessing requirements, as they vary (e.g., number of witnesses, whether beneficiaries can be witnesses).

Specificity and Successor Beneficiaries

• Be specific when outlining your wishes to avoid misinterpretations and potential disputes among heirs.
• Name successor beneficiaries in case your primary beneficiary dies before you. For example, you can name your spouse as the primary beneficiary and your children as successor beneficiaries.

Ownership and Community Property

• Determine ownership of assets before creating a will, clarifying if they are owned individually, jointly, or by another entity (trust or partnership).
• Understanding community property is essential for married couples in community property states. Community property is owned equally by both spouses, regardless of whose name is on the title.
• Spousal elective share varies by state and protects spouses from being disinherited.

Naming an Executor

• An executor administers the estate after death, handles debts and taxes, distributes property to beneficiaries, files tax returns, and represents the estate in legal claims.

Debt and Estate

• State laws determine how estate debt is handled, including which creditors get paid first if the estate cannot cover all debts.

Fair Doesn't Always Mean Equal

• Consider individual circumstances (financial needs, caregiving contributions, family size) when deciding how to distribute property to children.
• Understand the difference between "per stirpes" (division by family lines) and "per capita" (equal division per person) distribution.

Disinheritance and Explanations

• Disinheriting close family members can be challenging, as state laws often protect their inheritance rights.
• Consider including a statement explaining disparities in bequests to minimize potential conflict among heirs.
• Support less wealthy children through lifetime gifts or other means that won't be contested after death.
• Consider a trust for children's emergency needs to address potential changes in their financial situations.

Ethical Wills

• Ethical wills express values, hopes, and dreams for heirs and can clarify estate-planning decisions, but they are not legally binding.

Disclaiming an Inheritance

• Heirs can disclaim (decline) an inheritance to redirect it to other beneficiaries, potentially for tax advantages or other reasons.

What a Will Doesn't Cover

• Non-probate property is not governed by a will, including:
  • Property held in joint ownership with rights of survivorship.
  • Assets with designated beneficiaries (retirement plans, life insurance policies).
  • Assets held in certain types of trusts.

Probate

• Probate is a public legal process that validates a will and can be time-consuming and expensive.
• Avoiding probate is possible through various means, including:
  • Joint ownership with rights of survivorship.
  • Beneficiary designations.
  • Certain types of trusts.

Joint Ownership with Rights of Survivorship

• Joint ownership with rights of survivorship allows assets to automatically transfer to the co-owner upon death, bypassing probate.
• Downsides to joint ownership:
  • Loss of individual control over assets.
  • Potential for disputes or unintended consequences.
• Alternatives to joint ownership:
  • Tenancy in common.
  • Tenancy by the entirety.
  • "Transfer on death" or "payable on death" beneficiary designations.

Chapter 4: Probate and Ways to Avoid It

What a Will Doesn't Cover: Probate and Non-Probate Property

This chapter addresses the assets that are not governed by the terms of a will. These assets are transferred outside of a will, avoiding probate. Probate is a public court process where a will is validated. It can be costly and time-consuming and it makes the contents of the will part of public record.

Joint Ownership With Rights of Survivorship

One way to avoid probate is joint ownership, or "joint tenancy, with rights of survivorship." This means the property is co-owned with another person, such as a spouse or child. When the first owner dies, the property automatically transfers to the co-owner. While attractive because of its simplicity, joint ownership can be disadvantageous. For example, if a parent makes a child a joint owner of a bank account, the child could withdraw all the assets without the parent's consent.

Alternatives to Joint Ownership

"Tenancy in common" is a co-ownership alternative to joint ownership. This type of ownership does not include the right of survivorship, so each owner can sell or transfer their share independently. Upon death, a tenancy-in-common share generally goes through probate.

Some states allow a form of joint ownership for married couples called "tenancy by the entirety." It functions similarly to joint tenancy with the right of survivorship but offers additional asset protection benefits.

Another way to avoid probate is to own securities, investments, or bank accounts solely but with a beneficiary designation stating that it is "transfer on death" or "payable on death."

Retirement Plans and Insurance Policies

Assets in retirement plans, such as 401(k)s and IRAs, and proceeds from a life insurance policy, are not governed by a will. When the owner of these assets dies, they are transferred directly to the designated beneficiary. It is very important to keep the beneficiary designations for these assets current, ensuring they reflect any changes in family structure or financial circumstances. A primary and contingent beneficiary should be named.

If minor children are named as beneficiaries, they will need a guardian to manage the funds until they reach legal adulthood. A trust for minor children can also serve as a beneficiary.

When a trust is the beneficiary of an IRA, complex tax rules come into play. Consult an estate planning lawyer before designating a trust as an IRA beneficiary.

A trusteed IRA can be used as an alternative. They function similarly to typical custodial IRAs, with the money held in a bank or investment firm. However, they provide the protections of a trust, such as protecting spendthrift children or controlling distributions to beneficiaries. Financial firms typically offer trusteed IRAs only for accounts over $1 million.

Inherited IRAs: "Stretch IRAs"

If the IRA did not belong to a spouse, the beneficiary will want to keep it intact and retitle it as an "inherited IRA." This clarifies to tax authorities that the owner of the IRA is deceased and the beneficiary is the new owner.

Inherited IRAs are often called "stretch IRAs" because they stretch the tax benefits out for a long time. The beneficiary will eventually be required to take minimum distributions from the inherited IRA. These required distributions are smaller for younger beneficiaries, meaning more money can grow tax-deferred in the IRA.

Revocable Living Trusts

Revocable living trusts are the most common type of trust. They are often used to keep assets out of probate and to designate someone to manage property in the event of incapacitation. For example, a revocable living trust can be used to avoid a court appointing a guardian to manage assets if a person experiences mental decline.

The assets in the trust are transferred to the heirs without going through probate when the owner of the trust passes away. Avoiding the publicity of probate helps protect an estate plan from challenges, such as disgruntled heirs.

Chapter 5: Trusts

Trust Pitfalls to Avoid

Before setting up a trust, make sure to consider some caveats.

• Trusts can have setup costs of thousands of dollars plus annual trust management and accounting fees that can eat away some 1% of trust assets annually.
• They also can be highly complex, with lots of legal jargon, acronyms and tax rules, so it is important that a reputable trust lawyer carefully walk you through what you are signing.
• Unlike most investments, in which you regularly can track performance, you might not be around to see if your trust ends up working as intended, given that many trusts kick in only upon death.
• It is smart to sit down and discuss your trusts with your heirs, to help prevent any fractious family fights or litigation down the road.

Grantor Trusts

Trust creators can structure a trust as a “grantor trust”.

• That means that you can set up a trust so that you—the grantor— pay the income taxes on the trust’s earnings, rather than having the money for taxes come from the trust itself.
• If you pay the income taxes on the trust’s earnings, you’re effectively leaving more money for your heirs because it allows more of the trust assets to go to your loved ones rather than to the IRS.

Naming a Trustee

Choosing the right trustee, and the right mechanism for naming successor trustees over time, is a key decision for anyone creating a trust. It has only grown more important as more families create long-term trusts to last for many generations, or even forever.

• Trustees have a legal obligation to always act in the best interest of the trust and its beneficiaries, even if that means making decisions that you as the trust creator wouldn't necessarily agree with.
• That means you should choose someone you truly trust, who has a track record of sound financial judgment.
• You can name an individual, such as a relative, a friend or a trusted adviser, or a corporate trustee, typically a bank or trust company.
• Some trust creators even designate what are known as “trust protectors,” who generally have the power to fire and hire trustees.
• Regardless of whom you choose to serve as trustee, make sure to include a clause in your trust allowing you or your heirs to switch trustees if necessary. Changing trustees can still be a hassle in some states and may involve a trip to the courthouse, but it’s much less of a pain than staying with a bad trustee.

Trust Tip Sheet

Irrevocable trusts come in a wide variety of flavors and can be used for many purposes. In this section, the chapter goes over some of the most widely used types of irrevocable trusts, including trusts for minor children, trusts to benefit spouses and various tax-saving trusts.

Trusts for Your Children

One of the most popular reasons to create a trust is to leave money to minor children.

• Children under the age of 18 can’t inherit directly more than just a token amount of money.
• Without advance planning, if you and your spouse pass away, a court will appoint a property guardian—who could be a complete stranger—to handle your child’s inherited assets until he or she reaches adulthood (either 18 or 21, depending on state law).
• There are several steps parents can take to prevent that situation. (Guardianship is discussed in more detail in Chapter Eight.)
• Perhaps the simplest way is to set up a custodial account for your kids in your will.
  • In this instance, you name a custodian who will decide how the money should be managed.
  • The catch is that once your children legally become adults, they will have complete access to those funds, regardless of their maturity level.

Trusts and Control

• Trusts can be set up with a wide range of provisions, depending on the values that are important to you and your family’s situation.
• For instance, some people include special provisions, called “incentive provisions,” which can reward heirs with distributions for good behavior, such as finishing college, or punish them by withholding distributions for poor behavior, such as drug use. Incentive provisions are discussed in more detail further on.
• Some trusts include “spendthrift clauses,” which restrict an irresponsible beneficiary from squandering the trust’s principal on gambling, drugs, alcohol or other reckless behavior.
• You can set aside money for private school or college funds, or you can restrict spending to basic support, such as food, education and health care.
• The trustee you name has the responsibility to make or withhold distributions.

Spendthrift Trusts and Annuities

• In addition, or as an alternative, to using spendthrift trusts, you can mandate in your will that your executor buy an annuity from an insurance company to fund your heir’s inheritance. An annuity typically pays monthly income and can prevent your heir from burning through the cash all at once. Annuities are discussed in more depth in Chapter Six. While this strategy is smart if your heir has problems managing money, it is not recommended if your heir has a substance abuse problem because an annuity provides a regular flow of cash.

Leaving Money in Trust

• Many experts suggest that money left in trust for as long as possible is safer—from creditors, divorcing spouses and estate taxes—than money given outright.
• A trustee would have the discretion to give money to your kids as needed, as set out in the trust documents.

Incentive Provisions

• When you set up a trust, you can put in what are known as “incentive provisions”.
• This means that you attach certain strings to the trust in order to pass along your values.
• A trust might say, for instance, that heirs only get their shares if they finish college, or that beneficiaries might be disinherited if they abuse drugs or alcohol.

Incentive Provision Cautions

• Be very careful, however, when setting up incentive provisions because you risk ruling your heirs with a dead hand.
• Also, some stipulations can backfire. For instance, some trusts have provisions matching distributions with the amount of income a beneficiary earns. While the idea might be to discourage laziness in future beneficiaries, in reality you might just end up penalizing a child who chooses a noble but low-paying profession, such as social work or teaching, or chooses to stay home to raise a family, in favor of an heir who makes big bucks.
• Also, avoid including incentives or restrictions in a trust that violate public policy. A clause stipulating, for instance, that your heir cannot marry someone of a certain race or religion might not pass muster.

Trusts to Receive Your Own Inheritance: Inheritor’s Trusts

• As discussed earlier, many estate planners say a smart way to leave your heirs money is in a trust, rather than outright.
• That’s because money received in a trust, if structured properly, can be protected from your heirs’ creditors or in a divorce, and in some cases may be passed on to the heir’s own children free of estate taxes.

Credit Shelter Trusts

• Leaving money in a credit shelter trust, rather than outright to your spouse or other heirs, can also protect assets from creditors.
• In addition, if your spouse remarries after your death, a credit shelter trust can help ensure that the remaining money goes to your kids, rather than to your spouse’s new family. A credit shelter trust may also shield assets from being counted against Medicaid if your surviving spouse needs to go into a nursing home.
• Credit shelter trusts can be used to shield generation-skipping taxes, which are not portable. You can do this by making grandchildren beneficiaries of the trust and applying your GST exemption. And they can be used to protect both spouses’ state estate tax exemptions, which, unlike the federal estate tax exemption, are not portable, at least as of this writing.

Jointly Owned Property

• What about jointly owned property? If a husband and wife own property jointly with rights of survivorship, the assets pass directly to the surviving spouse upon the first spouse’s death. Thus, these assets can’t really be shielded in a credit shelter trust because they go automatically to the surviving spouse, rather than to the trust upon death.
• Review how your assets are currently titled and talk to your lawyer and financial adviser about whether you may need to shift ownership. (Rules are different if you live in a community property state, as discussed in Chapter Three.)
• You may also need to rebalance ownership every few years, just as you would your stock portfolio, if the value of one spouse’s assets, say, goes south with economic and stock market shifts.

Credit Shelter Trust as a Backup

• Another option is to leave money directly to your surviving spouse, but set up a credit shelter trust just in case.
• Your surviving spouse can disclaim, or give up, the money inherited directly and pass it on to the credit shelter trust if it seems like the right thing to do at the time. Disclaiming gives the surviving spouse discretion to decide how much money he or she needs at the time.
• However, as discussed in Chapter Three, disclaiming an inheritance is full of complicated rules, so be very careful if choosing this option.

QTIP Trusts

• Some very wealthy families, therefore, use QTIP trusts in combination with credit shelter trusts.
• They place the maximum amount that can be sheltered from the estate taxes in credit shelter trusts, and stick some of the money left over in QTIP trusts to ensure more control after death.

Trusts for Real Estate: QPRT

• Homes are the most valuable asset in many estates.
• A qualified personal residence trust, or QPRT (pronounced “Q-pert”), allows families to pass on the future appreciation of a house’s value to heirs, free of estate tax.

QPRT Cautions

• But beware: if you, the parent, die before the trust ends, the property goes right back into your estate—valued at the time of your death. So the strategy works best if you expect to live for at least another decade or so.
• And even if you outlive the trust, note that your heirs could face considerable capital gains taxes if they eventually sell the house because with a QPRT, your heirs don’t get a step-up in cost basis when the trust term ends. Step-up in cost basis is discussed in Chapter Two.
• Also, make sure to consult with your lawyer before setting these up because there are lots of tricky tax rules to consider.

GRATs

• One way to pass on assets that are expected to appreciate in value is a “grantor-retained annuity trust,” or GRAT.
• These trusts, whose life span can be as short as two years, are popular with families who have assets that are expected to increase in value, such as depressed stock or shares in a private company that eventually goes public. If the assets perform well, much of the appreciation in the trust can pass to heirs tax-free when the trust ends.
• In a typical GRAT, a parent transfers assets to a trust and receives fixed annuity payments from the trust for a set period of time.
• A GRAT is subject to a special interest rate, set by the government, which is locked in when the trust is created.
• With a GRAT, the lower the rate, the greater the chances of passing more money to beneficiaries.

Interest Rates

• Certain strategies, such as GRATs and charitable lead annuity trusts (CLATs, discussed in Chapter Seven), work better when rates are low, while other tactics, such as QPRTs and charitable remainder annuity trusts (CRATs, discussed in Chapter Seven), work better in a higher-interest-rate environment.
• When considering a trust strategy, make sure to discuss with your lawyer and accountant current interest rates and whether rates are projected to move higher or lower in the future. Waiting a month or two to take advantage of a higher or lower rate could make a real difference down the line.

Seek Flexibility

• Trusts are typically drafted to have two sets of beneficiaries—current and future. Current recipients, often a surviving spouse, traditionally receive income distributions. Future beneficiaries, often children or grandchildren, eventually receive the trust principal, the actual assets placed in trust.
• In the past, that has led to fights between beneficiaries over how the trust funds should be invested. A surviving wife, for example, might want the trust assets to be invested primarily in safe, income-producing bonds or dividend-paying stocks to maximize her income, while the children might prefer a more aggressive portfolio to boost principal.

Asset Protection Strategies

This section of the chapter focuses on asset protection, or placing your money where it’s safe from lawsuits or creditors, which is becoming increasingly common.

• People who are vulnerable to a lawsuit, bankruptcy or divorce—including doctors, corporate executives, business owners, real estate investors and even families with teenage drivers—have grown increasingly concerned about protecting their property.
• The goal of any plan like this is simple: to create as many hurdles as possible for potential creditors to jump through. Most plans are also designed to encourage your creditors to make a favorable settlement with you, rather than face long and perhaps expensive litigation.

Breakdown of Strategies

• Segregate business and personal risks. Place businesses, including family businesses, inside a corporate shell such as a limited liability company or a family limited partnership. If creditors go after your company because of a business problem, they will have a hard time taking any personal assets.
• Buy “umbrella insurance.” One of the first lines of defense is to shift your risks to another entity, such as an insurance company. Umbrella insurance protects assets from personal injury claims above the liability limits set by standard-issue home or auto policies.
• Maximize state exemptions. The laws governing protection of assets such as homes and insurance policies vary by state.
  • In Florida and Texas, you can transfer your wealth into your home (building an addition, say, or paying off a mortgage), life insurance policy, annuity or retirement plan, all of which are generally exempt from creditors.
  • In some states, married couples can title their property jointly in a special way called “tenancy by the entirety,” which can make it tough to reach if a creditor goes after one spouse.
    • In tenancy by the entirety, which isn’t available everywhere, each spouse owns the entire, undivided property, rather than a share of the property, as in traditional joint ownership.
    • Therefore, neither spouse can sell or transfer the property independently of the other.
    • In practical terms, this form of ownership means that a creditor of one spouse can’t go after the property unless the creditor has judgments against both spouses together.
  • More details about your state’s laws are available at www.creditorexemption.com.
• Use trusts. Doctors, executives and other professionals are increasingly turning to asset protection trusts, in which you transfer a portion of your own money into a trust run by an independent trustee, who controls the money but can give you occasional distributions. If set up properly, these trusts are supposed to be out of reach of creditors.
  • As mentioned earlier, the trusts have long been created in offshore jurisdictions, such as the Cook Islands and Nevis. The idea is to put money in a foreign place that doesn’t recognize a U.S. court order.
  • In recent years, a growing number of people are setting up asset-protection trusts in the United States, as several states, including Alaska, Delaware, Rhode Island, Nevada and South Dakota, have started permitting them over the past decade. You don’t have to be a resident of one of these states to set up a trust there.
  • Offshore trusts generally cost at least $25,000 to set up; domestic asset protection trusts generally can cost less than half of that. But remember, domestic trusts haven’t been adequately tested in court, and it’s unclear whether they will be upheld.
• “Equity-strip” your assets. That’s a fancy term for loading your property with debt so that it’s less attractive to creditors. Let’s say you have a vacation home you want to safeguard. Take out a bank loan against the value of the property and place the loan proceeds into an asset, such as an insurance policy or annuity, if such assets are exempt from creditors in your state.
  • The theory: if the house is loaded with debt, it isn’t going to be attractive to another creditor. The downside: you’ll have to come up with a way to pay back the loan.

Crummey Powers

• Many life insurance trusts use what are called “Crummey powers,” named after a party in a decades-old tax-related court case.
• Crummey powers can allow you to avoid or minimize taxes when transferring money to an insurance trust. Crummey powers are complicated and involve a bit of pesky paperwork, so make sure to get good legal guidance and be very careful in executing them.
• In order for such Crummey gifts to be tax-free, you can transfer up to $13,000 each year, per beneficiary, to the trust (the current gift tax exclusion in 2011). Now, here’s where the extra work kicks in: you have to tell the trust’s beneficiaries, in writing, that you have made a gift to the trust, and give the beneficiaries a window of opportunity of at least thirty days, every year that the trust is in force, to withdraw the money if they so choose. Your hope is that your heirs will choose not to take the money now but instead will let the trustee use the money to buy insurance premiums.
• Notifying beneficiaries about such gifts may seem like a lot of extra red tape, but tax experts recommend doing this in order for the gifts to pass muster with the IRS.

Annuities

• Annuities, in their most basic form, provide a steady stream of income during retirement. In short, you give an insurance company a lump sum of money in exchange for regular payments for the rest of your life or for a certain period of years. The annuity’s payments are either a fixed or variable amount, depending on the type you choose.

Estate Planning with Annuities

• Traditionally, annuities didn’t offer a lot of estate-planning options.
• With old annuity products, when you died, the insurance company typically kept whatever money was left in the contract. So if you bought a $500,000 policy one day and then tragically passed away the next day, the insurer, rather than your estate, might have kept the $500,000.
• Now, however, you can add options to annuities that allow you to leave part of the annuity to your heirs, although sometimes in exchange for a lower regular payout.
• For instance, you can name another person as a successor beneficiary to the annuity contract after you are gone. Or you can buy a “joint and last survivor” annuity, which continues to pay out as long as either you or your spouse is still alive. Or you can guarantee that your kids will receive part of the annuity’s remaining principal if you die before a certain time. Make sure to weigh whether the cost of any extra riders is worth the benefit, especially if you already have life insurance to provide adequate financial protection for your spouse or other heirs.

Chapter 6: Life Insurance

Life Insurance as a Tool for Providing for Your Family’s Future

• Life insurance is a valuable tool for estate planning.
• It is used to provide for your family's future.
• The chapter discusses the differences between term and permanent life insurance.
• It also covers the best way to structure a policy to reduce estate taxes.
• Basic insurance, tax, and estate-planning strategies for passing on family businesses are also discussed.

Life Insurance Trusts

• Many life insurance trusts use “Crummey powers,” which are named after a party in a decades-old tax-related court case.
• Crummey powers can allow you to avoid or minimize taxes when transferring money to an insurance trust.
• They are complicated and involve a bit of pesky paperwork, so make sure to get good legal guidance and be careful in executing them.

Crummey Gifts

• To make tax-free Crummey gifts, you can transfer up to $13,000 each year, per beneficiary, to the trust.
• This was the current gift tax exclusion in 2011.
• You must tell the trust’s beneficiaries, in writing, that you have made a gift to the trust.
• You must also give the beneficiaries a window of opportunity of at least thirty days, every year that the trust is in force, to withdraw the money if they so choose.
• The hope is that your heirs will choose not to take the money right away but instead will let the trustee use the money to buy insurance premiums.

Notifying Beneficiaries

• Notifying beneficiaries about such gifts may seem like a lot of extra red tape.
• However, tax experts recommend doing this to ensure these gifts pass muster with the IRS.

Annuities

• Annuities provide a steady stream of income during retirement.
• You give an insurance company a lump sum of money in exchange for regular payments for the rest of your life or for a certain period of years.
• The annuity’s payments are either a fixed or variable amount, depending on the type you choose.

Estate Planning Options for Annuities

• Traditionally, annuities didn’t offer a lot of estate-planning options.
• When you died, the insurance company kept whatever money was left in the contract.
• You can now add options to annuities that allow you to leave part of the annuity to your heirs, sometimes in exchange for a lower regular payout.
• For example, you can name another person as a successor beneficiary to the annuity contract after you are gone.
• You can also buy a “joint and last survivor” annuity, which continues to pay out as long as either you or your spouse is still alive.
• You can also guarantee that your kids will receive part of the annuity’s remaining principal if you die before a certain time.
• Make sure to weigh whether the cost of any extra riders is worth the benefit, especially if you already have life insurance to provide enough financial protection for your spouse or other heirs.

Tax Deferral Strategy for Family Businesses

• For most taxable estates, taxes are due within nine months after death (or fifteen months with an extension).
• If you have a closely held business that makes up more than 35% of the value of the gross estate, you may be able to make estate tax payments in up to ten equal annual installments under Section 6166 of the tax code.
• The first payment isn't due until five years after the original due date.
• This means you may be able to stretch out your payments for many years.
• One downside is that the IRS charges interest on these deferred payments, so your business must be able to cover those costs.
• Check with your estate lawyer to see if your closely held business qualifies for this tax treatment.

Passing on Business Interests to Heirs

• Family business owners must think carefully about how they want to bequeath shares of the business to their children.
• This is especially important if some kids work in the business and others do not.
• For example, if your daughter worked in the business for years, helping to make a division profitable, while your son chose a different career path, you might want to leave a controlling interest of the business to your daughter while leaving your son with assets comparable in value, such as life insurance or a house.

Business Succession Planning

• If you have a family business, it's recommended to consult with a lawyer or other adviser who is familiar with business succession planning.
• You can find advisers who are experts in family business succession through the Family Firm Institute.
• You should start early when thinking about and communicating your succession plans with your family.

Family Meetings

• The sources offer an example of a family who decided to get extra help to figure out their succession plans.
• This family was the fourth generation to operate beverage distribution companies and forest products businesses.
• Their generation was starting to get more involved in the business.
• They wanted to make sure they carefully communicated their business succession and estate plans early on to preempt future conflicts.
• Twice a year for several years, one member of this family attended three-day family meetings with his cousins, parents, uncle, and aunt.
• The meetings were facilitated by an estate lawyer and a psychologist who worked with families on communication.
• At the meetings, family members gave presentations about their businesses, so all attendees were up to speed about the companies.
• The family also developed a family mission and value statement and is working on a family constitution that will outline how the business should be governed.

Chapter 7: Philanthropy

Charitable Giving

Many people want to leave part of their estates to charities they believe in and support important causes.

Leaving money to charity offers significant tax breaks. Money left to charity is not subject to estate taxes or gift taxes because it is considered out of your estate. Charitable gifts made while you’re alive can generate income tax deductions. Donating appreciated assets, like stocks that have increased in value, during your lifetime can help minimize capital gains taxes. Some charitable vehicles, such as gift annuities, can even generate income streams for you or your heirs.

Many charities have planned giving specialists on staff who can help maximize the impact of your donation and work with you to ensure the terms are beneficial to both the charity and your family.

Bequests

A bequest is a direct gift to a charity through a will. Money left to a tax-exempt charity (known as a “501(c)(3)” entity) is not subject to estate taxes or gift taxes.

Because a bequest is made through a will, it becomes effective after death and you won’t be able to enjoy an income tax deduction for the gift. An individual cannot make a direct charitable gift to another individual; such contributions would be considered gifts rather than charitable donations.

You can place restrictions on a bequest by asking the charity to use the money to fund a specific cause. For example, Joan Kroc left her fortune to the Salvation Army with the stipulation that the money be used to develop community centers across the country offering educational, recreational, and cultural programs. It is helpful to speak to the charity about any restrictions you want to place on a donation to prevent misunderstandings.

Wills are revocable, so you can change a bequest at any time.

Charitable Vehicles

Some irrevocable charitable vehicles, such as a charitable lead or remainder trust, or a charitable gift annuity, can also provide funds for family members.

Charitable Remainder Trusts

In a charitable remainder trust, you transfer assets to an irrevocable trust, which then pays you or your family income for a set period or until you or your heirs die. At the end of the trust’s term, any money left in the trust goes to the charity designated by you, the donor.

Private Foundations

A private foundation is a tax-exempt charity whose funds typically come from a single individual, family, or corporation, rather than the general population. Private foundations give families complete control over the charity and, through strategic gifts, allow families to have a major impact on the cause they care most about.

There are some downsides to private foundations.

• They are expensive to establish and operate.
• You must meet a number of federal requirements and file annual paperwork.
• Because they are subject to public scrutiny, you must be transparent about your finances and operations.

Choosing a Charity

There are a number of websites that evaluate charities or provide information on their operations. These sites rely to some extent on IRS Form 990, which is filed by many charities. Faith-based groups are generally exempt from filing Form 990. The information charities provide on the form is sometimes incomplete or inconsistent, making it difficult to get accurate financial information or compare charities using only this paperwork.

It’s important to do your own research to choose a charity. Donors should ask non-profits about their goals, strategies, and how they monitor their impact. You should see how a charity measures its results in the short term and over a longer period. Check their website or annual report for details or call the charity and ask if you can’t find this information. You can also volunteer with the group or visit a site to get to know the staff, clients, and facilities.

Charity watchdog groups offer a guiding principle in evaluating charities: if a charity doesn’t answer questions about its operations or finances, or provide IRS filings or annual reports, you should think twice about giving to them. The American Institute of Philanthropy suggests that less than 40% of your donation should be spent on administration and fundraising.

Wealthy donors and private foundations often hire philanthropy consultants to perform due diligence on charities they support or are thinking about funding.

Chapter 8: Preparing for the Unthinkable

This chapter focuses on incapacity planning and preparing for death and discusses the key estate planning documents needed to make sure your wishes are carried out if you're unable to do so. The chapter also discusses planning for family members with special needs, making funeral and burial plans, and planning for the care of your pets after your death.

Power of Attorney for Finances

A financial power of attorney is a legal document that names an agent to make financial decisions for you if you become unable to make them yourself. The document can be tailored to specify exactly what powers your agent has and can go into effect immediately or only when you're declared incapacitated, which is known as a “springing” power of attorney. You can also name more than one agent and require that they provide regular account statements to family members or a third party.

Power of Attorney for Health Care

Similar to a financial power of attorney, a health care power of attorney or health care proxy designates an agent to make medical decisions for you if you're unable to do so. The document should include HIPAA authorization so your agent can access your medical records and make informed decisions about your care.

Avoiding Guardianship

If you become incapacitated and don’t have a power of attorney in place, a court may appoint a guardian to manage your affairs. Guardianship can be a time-consuming and expensive process, so it’s best to avoid it if possible by planning ahead.

The sources offer several tips for avoiding guardianship:

• Safeguard your power-of-attorney document by requiring that your agent provide family members or a third party with regular accounting statements.
• You can also name co-agents or limit the agent’s power to make gifts of your property.
• If using a springing power-of-attorney document, carefully specify how you are to be deemed incapacitated.

Naming a Guardian for Minor Children

A will is the legal document in which you name a guardian to care for your minor children if you're no longer able to do so. Choosing a guardian is one of the most important decisions parents make when creating an estate plan. Geography, familiarity with your child’s needs, and lifestyle should all be considered when selecting a guardian. It’s best to discuss guardianship with family members ahead of time so the role isn’t sprung on them if their services are needed. You should also name a successor guardian in case your first choice is unable to take on the role.

Planning for Family Members With Special Needs

If you have a child or family member with special needs, you'll need to take extra steps to make sure they're cared for after your death. The sources recommend setting up a special-needs or supplemental-needs trust to provide funds for a disabled person's care without cutting off access to government benefits. To maintain eligibility for government programs, grandparents and other relatives should also leave gifts or inheritances to the special-needs trust, rather than directly to the person with disabilities.

In addition, parents of children with special needs should:

• create power-of-attorney or guardianship documents for finances and health care, naming themselves as their child’s agent or guardian when their child turns 18
• create a “letter of guidance” spelling out everything another caregiver should know about their child’s special needs.

Advance Medical Directives and “Living Wills”

Advance medical directives, also sometimes referred to as “living wills”, spell out the kind of medical care you would want if you're incapacitated and unable to communicate your wishes. The documents typically have two parts: a health care proxy and a living will. The health care proxy names an agent to make medical decisions for you. The living will outlines what you want or don’t want in terms of end-of-life care. It's wise to check with a lawyer to make sure the document clearly expresses your wishes, as many people have religious considerations about end-of-life decisions that may not be reflected in a generic state form.

Funeral Arrangements and Disposition of Remains

The sources also recommend planning for funeral and burial arrangements and suggest being as detailed as possible in your instructions to prevent disputes. You may want to consider:

• burial or cremation
• location of burial
• type of service
• organ donation

Planning for Pets

Pets are considered property under the law, so it's important to make arrangements for their care after your death. You can leave instructions for your pet’s care in your estate plan, including information about their likes, dislikes, and idiosyncrasies, and set up a pet trust to provide funds for their care. You can also name a guardian for your pet in your will and leave instructions for their burial or cremation.

This chapter provides important information about planning for incapacity and death. The most important takeaway is to communicate your wishes to your family and loved ones to ensure that they're carried out.

Chapter 9: Preserving Family Harmony

This chapter of The Wall Street Journal Complete Estate-Planning Guidebook focuses on strategies to prevent family disputes and legal challenges to an estate plan.

Common Reasons for Estate Challenges

Most estate challenges happen when an estate plan isn't communicated well or when assets are divided unevenly among heirs. The most common grounds for challenging an estate plan include:

• Arguments that a third party, usually a favored heir, unduly influenced the deceased person.
• Claims that the deceased wasn't of sound mind when creating the plan.
• Assertions that the will contains drafting errors.

Strategies for Preventing Estate Challenges

Communicating Your Wishes and Demonstrating Capacity

Openly communicating your inheritance plan with family members while you are still alive can minimize suspicion and future challenges. It is wise to explain the reasoning behind your decisions, especially if you are distributing assets unevenly. For instance, explaining why one child receives the house and another receives the family silver reduces the likelihood of future challenges from those children.

If you prefer not to discuss these matters while you are alive, you can write a letter or record a video explaining your decisions. This can clarify your intentions, especially when disinheriting someone or making unequal distributions. You can also express your values and hopes for your heirs in an ethical will, which can accompany your legal documents.

Maintaining detailed records of your medical history, especially records related to your mental capacity, can also be beneficial. In the event of a challenge, these records can help demonstrate your mental soundness during the estate planning process. Similarly, drafting a series of slightly different estate plans over time can demonstrate that you consistently reviewed and confirmed your intentions. Each document should maintain the same general asset distribution, with minor variations like small bequests to new charities.

Safeguards to Minimize Conflict

Mediation and Arbitration Clauses

Including clauses in your will and trusts that require disputes to be settled through mediation or arbitration helps avoid expensive litigation.

• Mediation involves a neutral third party who helps family members negotiate a settlement. Mediation offers a more private, less contentious, and cost-effective alternative to court proceedings. However, it may be less effective when there is a power imbalance between parties.
• Arbitration involves a neutral third party who reviews evidence and makes a binding decision. This process is typically more formal and adversarial than mediation but less expensive than court. Like mediation, arbitration can be less effective when a power imbalance exists.

No-Contest Clauses

No-contest clauses, also known as "in terrorem" clauses, disinherit heirs who challenge the will. These clauses are intended to deter litigation. However, they may not be enforceable in all states, and their effectiveness can depend on how they are drafted. It's recommended to leave a small inheritance to potential challengers because it gives them something to lose if they contest the will.

Professional Executors and Trustees

Naming an independent advisor or bank as your executor or trustee can help prevent conflicts of interest and alleviate pressure on family members. This can be particularly helpful if you anticipate potential disagreements or if your estate plan involves complex distributions.

Planning for Blended Families

Blended families, where one or both spouses have children from previous relationships, require careful estate planning to minimize potential conflicts. Open communication and clear documentation of intentions are essential in these situations.

Prenuptial and Postnuptial Agreements

Prenuptial and postnuptial agreements help clarify each spouse's financial rights and obligations, reducing the likelihood of disputes. These agreements can specify how assets will be divided in the event of death or divorce.

Qualified Terminable Interest Property (QTIP) Trusts

QTIP trusts are frequently used in blended families to provide for a surviving spouse while ensuring that assets eventually pass to children from a previous marriage. The trust provides income to the surviving spouse during their lifetime, and after their death, the remaining assets are distributed to the designated beneficiaries.

Life Estates

A life estate grants a surviving spouse the right to live in a property for the rest of their life, after which the property passes to designated beneficiaries, such as children from a previous marriage. This strategy ensures the surviving spouse has a place to live while safeguarding the property for the intended heirs.

Dividing Tangible Personal Property

Tangible personal possessions, like jewelry and heirlooms, often cause more disputes than cash because of their sentimental value. Addressing these matters while everyone is in good health can prevent future conflicts. It is important to create a clear system for dividing personal property and to communicate your intentions to your heirs.

Early Discussions and Personal Property Memorandums

Estate planners recommend that families discuss who wants which items while everyone is still alive. This allows parents to address potential conflicts and to explain the history and significance of family heirlooms. The University of Minnesota's "Who Gets Grandma's Yellow Pie Plate?" program offers resources to facilitate these discussions.

Formalizing decisions in a personal property memorandum referenced in the will can help ensure your wishes are followed. This document can be more informal and private than a will, allowing for easier adjustments as circumstances change.

Distributing Property While Alive

Some individuals prefer to give away personal possessions while they are still alive. It is important to ensure that these transfers are documented and consistent with the overall estate plan to avoid disputes from other heirs.

Round-Robin Selection and Family Auctions

• The round-robin strategy involves heirs taking turns choosing items they want. This method can be effective if items are appraised beforehand so everyone understands their value.
• Family auctions, where family members bid on items, can also be an equitable way to divide possessions. Silent auctions, where bids are submitted privately, can help prevent emotional bidding wars.

Caregiving Contracts

Purpose and Benefits

Caregiving contracts formally outline the terms of care provided by a family member, including the services to be provided and the compensation to be received. These contracts can minimize family disputes by establishing a clear and legally binding agreement. They also protect the caregiver by ensuring they are fairly compensated for their time and effort.

Legal Formalities and Medicaid Compliance

To be legally enforceable and compliant with Medicaid rules, caregiver contracts must follow specific guidelines. The compensation must reflect the market value of the services provided and not be inflated to transfer assets out of the estate. The contract should clearly define the caregiver's responsibilities and the duration of the agreement.

Communication and Documentation

Openly discussing the caregiver contract with all family members is crucial to prevent misunderstandings and resentment. The contract should be drafted with the help of an attorney, and all parties should sign the document to demonstrate their understanding and agreement.

Summary of Tips for Preserving Family Harmony

• Open communication and transparency about estate plans are essential.
• Clearly document your intentions and the reasoning behind your decisions.
• Exercise caution when videotaping will signings to avoid potential challenges to capacity.
• Incorporate safeguards like mediation clauses and no-contest clauses.
• Consider using a professional executor or trustee to manage the estate.
• Employ strategies like round-robin selection or family auctions to divide personal property fairly.
• Utilize caregiver contracts to formalize and compensate family caregiving arrangements.

Chapter 10: Maintaining Your Plan

This chapter emphasizes the importance of maintaining and updating your estate plan over time to reflect changes in your life and the law.

Importance of Updating and Flexibility

• Life events such as marriage, divorce, the birth of children, the death of a spouse, and changes in financial status all require updating your estate plan.
• Changes in tax laws also necessitate reviewing and adjusting your estate plan.
• While irrevocable elements like trusts and completed charitable gifts can't be reversed, you can modify your will, guardianship designations, revocable living trusts, healthcare directives, and power-of-attorney documents.
• Communicating significant changes to your loved ones is essential to prevent surprises and minimize potential family conflicts arising from estate plans.

Storing Your Estate Plan

• It is critical to store your estate plan securely and inform your loved ones about its location for easy access when needed.
• Organ donation forms need immediate access, emphasizing the importance of clear communication about document storage.
• Recommended storage locations:
  • Secure, fireproof safes at your attorney's office.
  • Fireproof safes at home, avoiding easily accessible locations like bookshelves.
  • Bank safe-deposit boxes (check state laws for access regulations).
• Additional storage options:
  • Password-protected online repositories like www.assetlock.net or www.legacylocker.com for digital copies of documents and key digital data.
  • Provide clear instructions to executors and beneficiaries for accessing digital storage services.
• Key documents and financial data to keep accessible:
  • Estate planning documents (will, trusts, powers of attorney).
  • Financial accounts and investment information.
  • Insurance policies.
  • Beneficiary designation forms for retirement accounts.
  • Bills, mortgage or debt documents, credit card accounts.
  • Car title, registration, and insurance.
  • Tax returns.
  • Cemetery or funeral home information.
  • Electronic identification information (passwords, user IDs).
• Tips for organization:
  • Organize financial and personal files to aid heirs in locating accounts and assets.
  • Recent tax returns can be helpful as they often list financial institutions.
  • Consider consolidating multiple savings and investment accounts for simplification.

Reasons to Review Your Will

• Circumstantial changes: Marriage, divorce, birth of children, death of a spouse, financial changes.
• Tax law changes: Keeping up-to-date with tax law revisions.
• Banking industry consolidation: Verify the executor if your named bank has been acquired or merged.

Parting Thoughts

• Estate planning is an ongoing process that requires periodic review and updates to reflect changing circumstances.
• Open communication with family members about your estate plan is paramount.