Reviewing Your Estate Plans

If the W2’s and 1099’s haven’t been enough of a warning, then let this provide notice that taxes will be due soon! There were a number of small changes that you’ll want to be aware of as you prepare to meet with your accountant, but as long as you’re taking a look at your family’s financial picture, it’s a good time to be reviewing your estate plans. Here are five things to do now to make sure that you are making the most of the estate plans you have in place.

estate planning

1. Make sure your trusts are funded. It seems silly, but it’s extremely common. A family does the right thing by meeting with an attorney to draft their estate plans, and they have living, or revocable, trusts formed. The second step, once those documents are drafted, is to actually go to your financial institutions and change the ownership of your assets into that trust. In addition, there is some paperwork that needs to be filed to change the ownership of your home into the trust.


2. Check your beneficiaries. While you have your trusts and retirement plan documents in front of you, it’s a great time to check who is listed as the beneficiary of the trust, as well as your retirement accounts and insurance policies. If there have been changes to your family, or if it has been several years since you’ve named those beneficiaries, there may be changes, and it’s critical that they are accurate.


3. Review your Fiduciaries and Trustees. The named trustees and fiduciary organizations in your estate plan will be the ones to make major decisions with regards to investment choices, distributions, and are responsible for filing important tax documents. You may have named a co-worker, neighbor, accountant, or a friend at one point in time, but it’s a good idea to review those designations. Do you still maintain contact with them? Are they charging a fee? Are your heirs old enough now to take the reins?


4. Consider current Estate Exclusions. Each year, you are allowed to gift up to $14,000 per person, per recipient, or $28,000 per couple. If the gifting is made early in the year, not only have you moved any potential growth on that money out of your estate, but if something were to happen to you, that money would already have been moved out of your estate for estate planning purposes. The Illinois estate exemption remains at $4.0 Million for 2016, and the Federal estate exemption was increased slightly to $5.45 Million, per person. If you are near or exceeding those limits, it is important to take steps to reduce your estate to minimize your tax liability.


5. Stop Procrastinating! If you haven’t yet created a will or any sort of estate plan, you should make it a top priority this year. The peace of mind you’ll get from knowing that you have a power of attorney in place, guardianship for your children, and your estate distributed as you wish is worth the price of admission itself, not to mention being able to avoid probate and any potential estate taxes.

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