Estate Planning takes into consideration more than simply the preparation of a Will, Trust, Durable Power of Attorney, and Patient Advocate Designation. Even if you have none of these documents already, you have no doubt done some estate planning yourself and your estate planning advisor will need to know about such items as:
1. If you have life insurance individually purchased or which is a part of another program such as an employment benefit, you have designated beneficiaries for such policies. The insurance policies values and the beneficiaries you have designated should be noted by you.
2. Most married couples own the bulk of their cash accounts, investments, and residences as joint tenants or tenants by the entireties. Upon the death of the first of the two of them to die, the survivor "inherits" the whole account, investment, or property. Identifying investments and real estate which was acquired prior to 1977 in joint ownership may be particularly important in light of the Gallenstein decision which will allow for beneficial treatment of the cost basis of the property on the death of the first dying spouse if he or she provided the funds for the purchase price.
3. Joint property owned with a child can present numerous difficult problems particularly if there is more than one child. On the death of the parent, the child is the sole owner. Is he or she expected to share the assets with his or her sibling(s)? Will there be taxable gifts if he or she does? If all children are listed as joint owners in an attempt to avoid the gifting, what happens if a child dies before the parent? On the parent's death the deceased child's family is excluded since the child did not survive. Was this intended? Joint property ownerships need to be thoroughly explored.
4. Many persons have pension or profit sharing plans, IRAs, or a combination of them. These plans have complex payout rules which frequently do not easily correlate with other planning objectives. These plans require review, particularly as they relate to beneficiaries upon the deaths of the employee/retiree and the options for designation of such beneficiaries.
© John A. Scott, P.C.
© John A. Scott, P.C.
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