King & Wood, P.A.

How to Get Your Estate Plan Started

“You’re not too young, you do have enough assets and don’t you want to make things easier for your loved ones after you pass away?”

Estate planning involves deciding what you want to occur when you die and which of your trusted contacts may be empowered to manage those assets when you aren’t here. However, there are many misconceptions about estate planning, reports a recent article from Kiplinger, “It’s Estate Planning Week: Here’s How to Get Started.” Let’s set the record straight.

An estate plan can be as complicated or simple as you wish. For some, an estate plan may require a last will and testament to describe how you want your assets distributed upon death. If you have a large estate with many assets and complex goals, you could use a trust or a combination of trusts to administer assets after death.

For example, if you want to leave money for grandchildren but don’t want them to be able to access the funds until they reach a certain age or milestone, you could have a specific trust created for each beneficiary with descriptive language to explain what has to happen before the assets are distributed.

For married spouses, an estate plan typically leaves the assets to the surviving spouse and then, at the second spouse’s passing, includes instructions on who receives the assets. If there are no children, or you don’t want family members to inherit assets, you can use your estate plan to designate a charity or charities to receive gifts of cash or other assets.

Creating an estate plan involves creating an up-to-date balance sheet listing assets. How much you leave to heirs depends on whether you’ve spent your assets before you die or have significant liabilities.

You’ll need to name trustees to manage the assets if you establish trusts. You’ll also want to name successor trustees who can take over if the original trustee cannot serve. Talk with your trustees and successor trustees to be sure they are willing to take on the responsibility, since they will be in charge of the assets and need to make important financial decisions.

If your estate plan relies on a last will, you’ll need to name an executor who manages the estate, distributes assets, pays taxes and more. This person should be someone you trust implicitly. If you fail to name an executor, the court may appoint a representative.

An estate planning attorney will be familiar with any state-specific estate tax issues as well as federal estate tax issues. You’ll want to include your financial advisor and CPA to ensure that the estate plan works with all aspects of your life.

The estate plan isn’t completed until all documents have been signed and notarized and all assets are titled correctly. If assets are to be placed in a trust, your estate planning attorney will help you title assets to be sure the trust owns them and not your estate. If assets aren’t re-titled correctly, you may lose the benefit of the estate planning process. Check-in with your estate planning attorney every three to five years to be sure your estate plan still works. Family relationships and tax laws change, so estate plans need to be reviewed regularly. For example, the current federal estate tax exemption is $12.92 million for an individual, but unless Congress acts, this will sunset in 2025, when the exemption will revert to $5 million per person.

Reference: Kiplinger (Oct. 16, 2023) “It’s Estate Planning Week: Here’s How to Get Started”

What You Should Know about Inherited IRA

“Navigating the often complex world of inherited individual retirement accounts (IRAs) can be daunting, especially in the wake of losing a loved one.”

Inheriting an Inherited IRA can be even more complicated than the already complex world of inherited Individual Retirement Accounts (IRAs). Understanding the rules and regulations about inheriting an inherited IRA is critical to avoid major tax pitfalls, according to a recent article from yahoo! finance, “What Happens When I inherit an Annuity?”

After the passage of the SECURE Act, the rules concerning inherited IRAs became quite restrictive. Working with an estate planning attorney knowledgeable about IRAs can be the difference between a healthy inheritance or an unexpected huge tax liability.

An inherited IRA is an IRA left to a beneficiary following the death of the original account owner. The beneficiary who inherits the IRA can pass it to a successor beneficiary upon death. This creates the “inheriting an inherited IRA” scenario.

If the line of succession is not set up correctly, there is the potential for inherited assets to go through probate for a judge to rule on the rightful owner.

The original beneficiary is the first person to inherit the IRA. Once they have inherited the account, they may name their successor beneficiary. There are rules for the original beneficiary and the successor beneficiary.

The SECURE Act changed the timeline for inherited IRAs. It eliminated the “stretch” IRA strategy, which allowed beneficiaries to take distributions over their lifetime, stretching out the tax-deferred growth of the IRA over decades. Now, most non-spouse beneficiaries must withdraw all assets from an inherited IRA within ten (10) years of the original account holder’s death. This change presents new implications with regard to taxes, especially if the beneficiary is in their peak earning years.

Inheriting an inherited IRA can involve complex tax rules and pitfalls. There are timelines for taking required withdrawals and zero flexibility for mistakes.

You’ll also need to be sure the inheritance is documented correctly to avoid potential probate.

The rules differ for spouses inheriting an IRA since they shared assets with their deceased spouse. The SECURE Act allows spouses to treat the IRA as their own, providing more flexibility in distributions and potential tax implications.

Understanding the concept of Year of Death Required Distributions is essential. Let’s say the original owner was over a certain age at death. In this situation, a Required Minimum Distribution (RMD) may need to be taken in the year of death, which could impact the heir’s taxes for that year.

Knowing potential tax breaks related to inherited IRAs will also help with financial management. Non-spouse beneficiaries can deduct the estate tax paid on IRA assets when calculating their income tax.

These are complex issues requiring the help of an experienced estate planning attorney. Ideally, the conversation about what happens when you inherit an inherited IRA should occur while creating or revising your estate plan.

Reference: yahoo! finance (Sep. 5, 2023) “What Happens When I inherit an Annuity?”

Do You Need a Revocable Trust?

“One of the most common misconceptions about a last will and testament is that having a will avoids the need for probate court.”

Think of your will as a letter to the court explaining your wishes for property distribution. A revocable trust is one of the easiest ways to pass property to heirs outside of probate, says a recent article from The News-Enterprise, “Revocable trusts provide flexibility in estate planning.” Revocable trusts are popular tools to avoid probate, protecting the decedent and beneficiaries.

Another benefit of revocable trusts? The trustee who manages the trust can work on their own timeline rather than worrying about meeting dates set by the court. In most cases, assets can be distributed much faster through a revocable trust than through a will. However, expediency isn’t always the main reason for a trust. Flexibility on timing is another benefit.

Revocable trusts can be held individually or jointly. This is usually determined by how assets are held before being placed in the trust. A joint trust is the more comfortable approach if all assets are owned jointly. Independent trusts usually work best for couples who prefer to keep assets separate.

Revocable trusts also offer several options for the distribution of property on the death of the first spouse.

The most commonly used option is the transfer of all property to the surviving spouse upon the first spouse’s death. All trust property remains in a “survivor’s trust,” which gives the surviving spouse all access and control, including the right to change beneficiaries. This works best for couples who have been married for a long time and share beneficiaries in common.

For blended families, another option is to split the trust assets upon the death of the first spouse between a survivor’s trust and a decedent’s trust. The surviving spouse retains full control over the survivor’s share of the trust property but becomes a beneficiary of the decedent’s trust. If the surviving spouse’s assets are insufficient, the decedent’s trust can be used for the benefit of the survivor. Nevertheless, the surviving spouse may not change the ultimate beneficiaries of the decedent’s trust.

Another option is to pass all assets completely outside of the control of the surviving spouse upon the first spouse’s death. Assets may pass into a family trust to benefit the spouse and other beneficiaries but at the discretion of a trustee. Alternatively, the assets may pass directly to residuary beneficiaries, with no assets left in trust for the surviving spouse.

This is often used when one spouse is unable to manage their own financial affairs or if one spouse is in a nursing home.

Planning should always be designed for the unique needs of each family. If the wish is to avoid probate and protect spouses and beneficiaries, revocable trusts offer many useful options.

Reference: The News-Enterprise (Aug. 5, 2023) “Revocable trusts provide flexibility in estate planning”

Married Couples can Use Estate Tax Exemptions in Estate Planning

“A primary goal of most married couples when contemplating basic estate planning documents is to ensure that the surviving spouse, and commonly, the couple's children and grandchildren, are supported financially.”

Estate tax avoidance and mitigation are central considerations for financial security for surviving spouses. According to a recent article from The National Law Review, “Basic Estate Tax Planning for Married Couples: Opportunities For Use Of Estate Tax Exemptions,” the first spouse may leave property of unlimited value to the surviving spouse without incurring any estate tax upon the death of the first spouse. This unlimited marital deduction shields assets from estate taxes and helps support the surviving spouse. Assets can be distributed directly to the surviving spouse or through an indirect transfer to a qualifying trust for the surviving spouse’s benefit.

Most couples use trusts for asset protection, most commonly for the preservation of assets for children from a prior marriage and asset management help for the surviving spouse. The marital deduction is a valuable estate tax avoidance tool for married couples.

However, estate tax law is not generous for non-spouse beneficiaries. Legislation passed in 2013 allowed individuals to leave assets totaling $5 million in value (indexed to inflation since 2011) to non-spouse, non-charitable beneficiaries and then doubled this amount following the Tax Cuts and Jobs Act to $10 million. However, if additional legislation is not passed before the sunset date of January 1, 2026, this amount will be cut in half.

In 2013, Congress made the portability of a spouse’s estate tax exemption permanent. This allows the surviving spouse to capture and use the first decedent spouse’s remaining estate tax exemption and the surviving spouse’s own exemption. To capture this estate tax exemption, an estate tax return must be filed in a timely manner after the death of the first spouse.

If spouses have a total estate exceeding available exemptions, they may use what is known as the “Credit Shelter Trust Planning” or “Optimal Marital Deduction Planning.” A trust is established, funded with assets of the first spouse to die, to use the spouse’s estate tax exemption. Assets in the trust are available to the surviving spouse for life but are not included in the survivor’s taxable estate upon their death. The goal benefits the surviving spouse and reduces any estate tax to maximize benefits for the children and grandchildren.

Another frequently used tool is the “disclaimer” plan, which allows the survivor to move certain assets into a trust for the survivor’s benefit rather than receiving assets directly. For married couples with estates valued at less than their available estate tax exemptions, a disclaimer plan provides the “all to spouse” plan and the option to implement a tax-advantaged trust. All assets are left to the survivor; then, based on the value of the first spouse’s estate, the surviving spouse may choose to disclaim the first spouse’s assets and divert them to a tax-advantaged trust.

It must be noted that there is no “one-size-fits-all” plan for married couples who wish to care for their surviving spouse, children, and grandchildren. It’s important to understand the basic estate tax avoidance or mitigation tools to create an estate plan to consider the couple’s planning goals and values. An experienced estate planning attorney can create a comprehensive estate plan to suit each family’s needs.

Reference: The National Law Review (June 24, 2023) “Basic Estate Tax Planning for Married Couples: Opportunities For Use Of Estate Tax Exemptions”

Estate Planning for Today’s Modern Blended Family

“The modern blended family has far more needs when it comes to estate planning than a traditional family. Here are some challenges, tips and solutions.”

If you grew up watching Leave it to Beaver, you saw a family with traditional estate planning goals and challenges, as compared to today’s Modern Family, with stepparents, stepchildren and a host of dynamics which calls for a vastly different estate plan, reports a recent article, “Comparing Estate Planning: ‘Leave It to Beaver’ vs. ‘Modern Family’” from Kiplinger.

Planning goals require identifying overall goals and concerns and identifying heirs. Are you concerned about divorce or lawsuit protection? What do your family members need? Probate will subject your estate and family to higher costs, delays and the public nature of a formal court proceeding where heirs’ names, inheritances and asset values become public information.

Failing to identify heirs or beneficiaries and their needs clearly is especially important for a blended family. This could result in your state's probate code becoming the guiding law, which may not align with your wishes. The probate code is less likely to identify desired heirs of a blended family.

Estate planning for a blended family must also address who will be authorized to make decisions in the event of incapacity to make medical decisions. Failing to do so could result in a family member whom you might not have named making important decisions on your behalf. An estate plan should include healthcare proxy and HIPAA release forms.

When correctly drafted and executed, trusts can help avoid probate. Here’s an example of how this can go wrong. A woman’s husband died. He had handled the couple’s finances. All of the assets were in his name alone. In this case, California, the probate code limited the distribution to one-third for the surviving spouse and two-thirds for the children, including one minor child. The surviving spouse felt she was a 50% owner of the combined assets and fully expected to receive control and ownership of all assets upon his death. Having assets go to children was unexpected, created financial difficulties and strained the family relationship.

Do you live in a community property state? In these states, property for married couples is characterized as community (jointly owned) or separate (owned by one spouse). Care needs to be taken by both spouses as to how properties, assets and accounts are titled.

Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, and Washington are community property states. Property rights established in a community property state can still have consequences for those moving to states that don’t have community property rights. If that describes your situation, a meeting with an estate planning attorney should take place to discuss the implications for your estate property distribution.

An estate plan should be created to provide for the surviving spouse and the deceased spouse’s children. In traditional families, all assets usually go to the surviving spouse with few restrictions. In the case of second marriages, there are ways to provide for the surviving spouse. One way is to retain the deceased spouse’s assets in a trust. The trust provides for all the income to the spouse and discretionary principal distributions. A Qualified Terminal Interest Trust (QTIP) may permit the trust to qualify for the marital deduction for estate tax purposes.

The selection of trustees is an important decision for a blended family. In this case, it may be better to have a professional fiduciary who is not emotionally engaged with one side or another to alleviate any emotional baggage.

An experienced estate planning attorney will be able to guide the family through creating a comprehensive estate plan to assuage concerns about children from prior marriages receiving their rightful inheritance, while protecting the surviving spouse’s quality of life.

Reference: Kiplinger (June 12, 2023) “Comparing Estate Planning: ‘Leave It to Beaver’ vs. ‘Modern Family’”

What is the “I Love You” Last Will and Testament?

“An ‘I Love You Will’ works great as long as everything goes as planned. However, there are three reasons that kind of will may not love you back.”

Having a will and an estate plan created is one of the most loving things a couple can do for each other and all the people and causes in your life, says a recent article, “I Love You, But Your ‘I Love You Will’ Needs to Go” from Kiplinger. However, if what you and your loved one have in mind is an “I love you will,” you need to know that this isn’t always the best option. Sometimes, the unintended consequences can send a very different message.

I Love You Wills refer to reciprocal last wills created by spouses where each leaves the entire estate to the other spouse outright. The remaining assets pass to their mutual children upon the surviving spouse's death.

These types of wills are usually created for couples making their first wills, those with simple estates and those who want to have a will, any will, in place before a significant life event, like getting married, having their first child or going on a long trip. Others opt for I Love You Wills because they want to avoid thinking or talking about death and creating a will and would rather have the simplest plan.

However, an I Love You Will can be an “I don’t care so much” will in some circumstances.

Control on the death of the survivor. Nothing stops the surviving spouse from changing their will after the first spouse’s death. They can easily reduce or outright eliminate any gifts to children of the marriage in favor of a new spouse, new children, stepchildren, or any other person named in the original will.

One way to address this is to create a trust for the surviving spouse. An independent trustee or co-trustee would then serve with the surviving spouse and assess distribution decisions. This makes it harder to disinherit those included in the original will, as long as they are named trust beneficiaries.

Lost opportunity for a ‘primary’ charitable bequest. Philanthropically minded people may have wished to leave something to a charity. It may be better to include a bequest in their own will, rather than waiting for both spouses to pass. A will simply stating that assets pass on the first spouse’s death to the survivor could easily cause any charitable bequests to evaporate.

No protection for incapacity. If your spouse was incapacitated when you died and couldn’t manage their financial affairs, who would be in charge of their legal, financial and health care? What would happen to their inheritance? Most people would prefer to choose the person in charge of their property on behalf of their spouse, rather than a stranger named guardian or conservator by the court. A will leaving all assets outright to the surviving spouse doesn’t offer any protection for incapacity.

While having a simple will is better than no will, having a comprehensive estate plan addressing inheritance and incapacity issues is the best plan for the future. Speak with an experienced estate planning attorney to create your estate plan to protect you, your spouse and your family.

Reference: Kiplinger (May 2, 2023) “I Love You, But Your ‘I Love You Will’ Needs to Go”

Why You Need to File an Estate Tax Return

“The estate tax is a one-time tax due nine months after someone dies, if their assets reach a certain threshold.”

Even if your spouse has died and left all their assets to you and no estate tax is due, you still need to file an estate tax return. Doing so may save your family significant sums in estate taxes after your death, according to a recent article from Forbes, “5 Reasons You Must File An Estate Tax Return (Even When No Tax Is Due).”

The estate tax is a one-time tax due nine months after the date of death. The federal threshold in 2023 is $12,920,000 for an individual. Many states have their own estate taxes, with thresholds ranging from $1 million in Oregon and Massachusetts to $12,920,000 in Connecticut. Your estate planning attorney can advise which assets are included in calculating this amount. For example, many people are surprised to learn that proceeds from their life insurance policies are taxable on their death, unless the policy is owned in an irrevocable trust.

No estate tax is due if your assets are left to your surviving spouse because of the unlimited marital deduction. You get an unlimited deduction for the assets left to your spouse. Spouses can leave any amount to their surviving spouse tax-free, whether $2 or $2 million. However, there are reasons to file an estate tax return. The law requires it, even if the value of your estate assets is below the filing threshold.

If you’ve done estate planning, your spouse most likely has a trust that will break into various sub-trusts upon her death. As the surviving spouse, you’ll need to fund those trusts and apportion assets to them, which is done through the estate tax return. The estate tax return establishes the value of what those trusts are funded with.

Critical tax elections. When you file an estate tax return for your spouse, you’ll make certain elections to determine what assets are included in your estate when you die.

Tax savings for heirs. If your spouse has not used up all their $12,920,000 exemption, you can lock in their unused portion and port it to your estate tax return when you die. The portability of the deceased spouse’s unused exemption could potentially save your children millions of dollars in estate taxes in the future.

The combined exemption for two spouses is currently $25,840,000. The federal estate tax rate can be as high as 40%. By locking in the unused exemption, you could save more than $5 million in estate taxes that would otherwise be due on your death. Even if your assets are not in the $12 million to $25 million range, this is still smart because your assets could increase in value, and the estate tax thresholds are scheduled to drop to $5 million in 2026 (adjusted for inflation).

More tax savings for grandchildren. If your spouse has yet to use all of their general-skipping transfer tax (GST Tax) exemption, you can lock in their remaining GST Tax exemption. The GST Tax is a 40% tax on assets, if you “skip” your children and leave them directly to your grandchildren or in a trust that will eventually be distributed to them. The amount of GST Tax exemption is the same as the estate tax exemption, $12,920,000 per person in 2023. Therefore, the amount is the same, but they are different taxes.

Reference: Forbes (May 10, 2023) “5 Reasons You Must File An Estate Tax Return (Even When No Tax Is Due)”

What Happens When There’s No Will?

“Dying intestate can have unintended consequences for pretty much every family type. However, it is especially painful if there are unmarried partners or stepchildren, who are left out under the law in almost every scenario.”

According to a recent article, “The Confusing Fallout of Dying Without a Will,” from The Wall Street Journal, despite the consequences for their heirs and loved ones, millions of Americans still don't have a will. The total wealth of American households has tripled over the past thirty years, according to the Congressional Budget Office. Still, more than half of Americans polled by Gallup said they didn’t have a will in 2021. Another survey showed that one in five Americans with investible assets of $1 million or more don’t have a will.

Dying without a will means the laws of your state will determine who gets your assets. In some cases, loved ones could end up with nothing. They could be evicted from the family home and even hit with massive tax bills.

This is especially problematic for unmarried couples. One example—after 18 years of living together, a couple had an appointment with an estate lawyer to create wills. However, the woman died in a horseback riding accident just before the appointment. Therefore, her partner had to get the woman’s sons, who lived overseas, to sign off, so he could be appointed her executor. The couple had agreed between themselves to let him have the home and SUV they’d purchased together. However, state law gave her sons her 50% interest. Therefore, he had to buy out her son’s interest to keep his home and car.

Dying without a will, or “intestate,” means you can’t name an executor to administer your estate, name a guardian for minor children, or distribute the property as you want.

Here’s what you need to know about having—or not having—a will:

State law governs property distribution. In some states, where there is a surviving spouse and children, the surviving spouse gets 100% of the estate, and the children get nothing. The surviving spouse gets 50% in other states, and the children divide the estate balance. For example, in Pennsylvania, if there are no children but there is a surviving parent, the surviving spouse gets the first $30,000, and the balance is split 50/50 with the parent. In Tennessee, a surviving spouse with two or more children receives a third of the estate, with the rest split between the children.

Check on all assets for beneficiary designations. Retirement accounts and life insurance policies typically pass to whoever is listed as the beneficiary. However, if you never named a beneficiary, the state’s laws will determine who receives the asset.

If you don’t have a will and want to be sure a partner gets these assets, you’ll need to speak with an experienced estate planning attorney to explore your options. For example, you might be able to use a transfer on death deed or a payable on death account. However, there may be better ways to accomplish this goal.

Reference: The Wall Street Journal (May 2, 2023) “The Confusing Fallout of Dying Without a Will”

What to Do When a Spouse Dies

“Unfortunately, during the grieving process surviving spouses also need to navigate the complex financial issues that arise after the death of their partner.”

The death of a spouse is one of life’s most stressful events and is an overwhelming experience. Having to deal with life’s legal and financial aspects while grieving is a challenge, says a recent article, “What To Do After The Death Of A Spouse,” from Forbes. One thing to note: all tasks don’t have to be done at once.

What does need to be done promptly is making funeral arrangements, notifying family and friends and alerting your estate planning attorney. Other immediate steps include:

• Obtaining multiple copies of the death certificate
• Asking a friend or relative to watch the house during the funeral. Burglaries often occur during funerals, when burial plans are public.
• Arrange for any pets to be cared for.

There are a number of things to avoid as well. Letting grief and fear delay important actions can lead to larger estate problems. Don’t neglect to contact Social Security to report the death and monitor tax and other deadlines. Don’t start giving away assets, whatever persistent family members may say. You’ll need to go through the estate process properly. Assets are not distributed until all other tasks have been completed.

Legal and financial documents must be gathered and reviewed, including bank statements, investment accounts, retirement accounts and beneficiary designations, life insurance policies, estate planning documents and outstanding debts or liabilities.

Bills need to be paid. This can become problematic. For example, were the bills paid from joint accounts, your or your spouse’s account? Do you have a list of all accounts? Is it okay to pay a joint bill from your bank account? Do you need to change regularly made payments formerly made from your deceased spouse’s account to your account?

Hopefully, you and your spouse had the right estate planning documents completed beforehand. Next, contact your estate planning attorney to discuss the will and any trusts. Assets owned by your spouse only will likely go through probate. Assets with beneficiary designations, like retirement accounts or life insurance policy proceeds, will go directly to the beneficiaries.

The surviving spouse needs to file taxes for themselves and the deceased spouse by April 15 of the following year. Discuss with your estate planning attorney whether or not you’ll need to file a federal or state estate tax return, which is due nine months after death. Note that these may need to be filed even if no tax is due.

Reference: Forbes (April 20, 2023) “What To Do After The Death Of A Spouse”

You Can Avoid Unintended Consequences

“Although there is certainly no shortage of people with selfish or malevolent intent, a great number of estate plans that end in disaster are due to unintended consequences.”

The mistake can be as simple as signing a document without understanding its potential impact on property distribution, failing to have a last will and testament properly executed, or expecting a result different from what the will directs. Unfortunately, these unintended consequences are relatively common, says the article “Advice for avoiding unintended issues in estate planning” from The News-Enterprise.

The most common mistake that leads to unintended consequences is leaving everything to a spouse in a blended family. Even if children don’t have a close relationship with their stepparent, they’re willing to get along for the sake of their biological parent. However, when the first spouse dies, the decedent's beneficiaries are generally disinherited if the surviving spouse receives the entire estate.

If the family truly has blended and maintains close relationships, the surviving spouse may ensure that the decedent’s children receive a fair share of the estate. However, if the relationships are tenuous at best, and the surviving spouse changes their will so their biological children receive everything, the family is likely to fracture.

Using a revocable living trust as the primary planning tool is a safer option. An experienced estate planning attorney can create the trust to allow full flexibility during the lifetime of both spouses.  Upon the first spouse’s death, part of the estate is still protected for the decedent’s intended beneficiaries.

This way, the surviving spouse has full use of marital assets but can only change beneficiaries for his or her portion of the estate, protecting both the surviving spouse and the decedent’s intended beneficiaries.

Another common mistake occurs when married couples execute their last will and testaments with different beneficiaries. For example, if they’ve named each other as the primary beneficiary, only the survivor will have property to leave to loved ones.

An alternative is to decide what the couple wants to happen to the estate as a whole, then include fractional shares to all beneficiaries, not just the one spouse’s beneficiaries. This protects everyone.

Many people assume that if they die without a will, their spouse will inherit everything. Unfortunately, this is not always the case, and a local estate planning attorney will be able to explain how your state’s laws work when there is no will. Children or other family members are often entitled to a share of the estate. This may not be terrible if the family is close. However, if there are estranged relationships, it can lead to the wrong people inheriting more than you’d want.

Failing to plan in case an heir becomes disabled can cause life-altering problems. If an heir develops a disability and receives government benefits, an inheritance could make them ineligible. The problem is that we don’t know what state of health and abilities our heirs will be in when we die, and few will want their estate to be used to reimburse the state for the cost of care. A few extra provisions in a professionally prepared estate plan can result in significant savings for all concerned.

Estate planning is about more than signing off on a handful of documents. It requires thoughtful consideration of goals and potential consequences. Can every single outcome be anticipated? Not every single one, but certainly enough to be worth the effort.

Reference: The News-Enterprise (March 25, 2023) “Advice for avoiding unintended issues in estate planning”