Step 1: Review your account beneficiary designations, especially since the 2019 SECURE Act significantly changed the required distribution rules for most retirement accounts. Most non‐spouse beneficiaries must now fully withdraw an inherited IRA within 10 years of the IRA owner's death, so if you have a retirement account slated to go to someone other than your spouse, this is a good time to revisit your strategy.
Step 2: Review the people and institutions you have listed as trustee, executor and power of attorney in your plan to ensure they are still the most appropriate choice. Over time, it's often the case that some individuals are no longer able to fulfill their role, or may even have died.
Step 3: Consider annual exclusion gifts of up to $15,000 to beneficiaries. As with the estate tax, your ability to do this may be limited in the future under proposed legislation.
Step 4: If you will potentially be subject to estate tax (which currently applies to a married couple with assets of more than $23.4 million), consider using your 2021 Federal Estate and Gift Tax Exemption this year. Proposed legislation could significantly reduce the amount of the exemption at some point in the future, which now sits at $11.7 million per person.
For your children, you may want to consider either outright gifts or gifts to trusts for their benefit.
For your spouse, you may wish to consider a Spousal Lifetime/Limited Access Trust (SLAT), which allows each member of the couple to retain limited access to the assets and income. Each spouse can create a SLAT for the other, but the trusts can't be identical.
Step 5: The final step is simple: take action. Estate planning is a complicated process that takes due diligence and follow-up to complete. Our team will walk you through every step of the way. Please reach out to our team today to schedule a time to speak about our estate planning review process!