There are many reasons to look at your old estate plan. What should not be forgotten is that everyone needs a will.
There are many reasons to revisit your estate plan that don't include the new tax laws that doubled the individual estate gift and GST tax exemptions to about $11.2 million per person (and doubled it for married couples), according to Forbes in “7 Reasons to Revisit Your Estate Plan, Trump Tax Law Aside.”
A will serves as the primary vehicle to convey your intentions for your assets and explain your legacy. The provisions of the will can be used to designate how assets will be transferred, whether outright to beneficiaries, to existing trusts or into a new trust that is created under the provisions of the will. If you use the will to create a testamentary trust, the will is where you specify the age for distributions to the beneficiaries and other important details. The will is also how you convey your wishes to make a gift to specific institutions and who should receive family heirlooms.
The executor or personal representative of the estate is the person or institution in charge of managing your affairs, after you have passed. The executor gathers all the information about your estate, including assets and debts, filing taxes, and administrative tasks. That person is named in the will.
If you have minor children, or a child with a disability, you want to choose a guardian and a successor guardian. If you do not, the court will appoint someone to rear your child(ren), and that may not be the person you would have wanted. Your spouse is always the obvious choice, but there are instances where both parents die unexpectedly, with no plans in place for their children.
There are many different types of trusts used to accomplish different things. They can be used to control assets and their distribution, which is particularly important when minor children are in the family. Trusts should be used when there is an individual in the family with a disability, an addiction or other issues who cannot manage their finances on their own.
Tax planning is a major part of any will. For a long time, estate planning attorneys focused on how assets were titled so that the first of a married couple to pass would be able to fully use their estate tax credit. However, the relatively new concept of “portability,” which allows any unused credit from the first spouse to pass to be used for the benefit of the second spouse, eliminates the need for any unused estate tax credit to go into a bypass trust.
Not only do you need a will but this year you should consider reviewing your will, if you have not done so.
Reference: Forbes (March 15, 2018) “7 Reasons to Revisit Your Estate Plan, Trump Tax Law Aside”