Your New Estate Planning Checklist

Fortunately (or unfortunately, if you’re not all that happy with our current estate and gift tax laws), the start of 2015 brings no significant changes to the federal or Virginia tax laws or to Virginia laws affecting estate and trust planning and administration.

So instead of an update on new laws and tax rates, here’s a practical checklist you can use to evaluate your estate plan and, perhaps, make some financial and planning resolutions for the upcoming year. Because an out-of-date estate plan might be missing useful features that I’ve added in recent years in response to those years’ changes in tax and nontax estate planning laws and court decisions.

Action This DayDo you have an estate plan in place? (That question is for you, non-clients.) Whether you do or not, please go through the rest of this checklist. If you answer “no” or “I don’t know” to any of the following questions, please contact me so that we can get things set right.

Do you have a revocable living trust and pour-over Will in place? If so, have you and I sat down and reviewed them within the last three or four years?

Does your Health Care Power of Attorney permit a person (such as your spouse or a family member) or committee of your choosing (such as a family member in concert with your doctor) to make emergency health care decisions for you in the event you are ever unable to do so?

Are you pretty sure that your estate plan will minimize death taxes and income taxes for your beneficiaries (including taxes on your real estate, investments, life insurance proceeds, and IRA or TSP assets)?

Do you need to take any steps to avoid to avoid possible will contests or similar disputes among the beneficiaries (and non-beneficiaries) of your estate?

Are the people you have named in your Wills as Guardians of your minor children’s persons, and named in your trusts as Trustees of the assets you might leave them, still the best people (or financial institutions) for the job? I often counsel my clients to pick co-Trustees – banks or trust companies to do the heavy lifting, and trusted individuals (who might be the beneficiaries themselves) to keep an eye on them.

Does your estate plan provide protection from creditors and lawsuits for assets you leave to your surviving spouse, children, and grandchildren? (If it was drafted before 2012, it almost certainly doesn’t protect them to the maximum extent now possible.)

If you have a revocable living trust in place as part of your estate plan (and you should), have you transferred all of your assets to yourself as Trustee so that your family can avoid the expenses, annoyances, and stress of probate? If not, we should get started this day.

Does your estate plan protect your children’s inheritances in the event your surviving spouse chooses to remarry? (And your surviving spouse’s inheritance, in case he or she chooses unwisely?)

Does your estate plan include provisions to allow the assets you leave to your surviving spouse and your children to get a step-up in basis at their deaths, to minimize future capital-gains taxes?

If this checklist leads you to believe there might be ways your current estate plan could be improved, I invite you to contact me so that we can make it better.