Estate Planning Resolutions for 2021
The holiday season soon will have come and gone, and many of us will be glad to begin turning the page on the unprecedented year that was 2020.
In retrospect, it is easy to focus on the negative aspects of a year that brought greater public health challenges, political divisiveness, and economic uncertainty than most any year in recent memory. But hopefully these low points have come with a silver lining: a renewed focus on what is really important to us.
If there ever was a time to make meaningful New Year's resolutions with an emphasis on the future and wellbeing of ourselves and our families, perhaps it is now. Instead of purchasing an online fitness membership or pretending that you will enjoy eating lettuce as your entree this year, let us resolve to secure our family's future by planning for the unfortunate inevitabilities of incapacity and death. There is no time like the present to evaluate the estate planning that we have (or have not) undertaken.
Relevant considerations for you and your family may include:
What federal economic and tax policy changes are likely to come in the wake of the recent election, and how might new policy impact or undermine my existing estate planning?
Do I have Powers of Attorney and a Living Will that express my wishes and allow my family or representatives to make financial, business and health care decisions in the event of my incapacity?
Is my current estate plan structured in a way that will promote efficient administration and minimize family effort and expense, or even controversy, at my death?
Have my adult children executed the necessary basic legal documentation that would allow me to assist with their affairs in the case of accident or illness?
Will my qualified retirement account(s) pass to my beneficiaries in a protected and tax-efficient manner, in light of recent legislation?
Have I implemented planning that will allow my business to continue operating after my incapacity or death?
Are my assets structured in a way that limits my exposure to potential liability?
Significant Tax Law Changes; Past, Present, and Future
Significant changes to federal gift and estate tax law went into effect in 2018. Even more recently, Congress passed legislation to substantially alter income tax deferral opportunities with regard to inherited retirement accounts. And now, in light of government stimulus spending and a shifting political landscape in Washington, D.C., it is safe to assume (i) that additional changes are on the horizon, and (ii) that those changes may not be "friendly" to many taxpayers. For those who implemented their estate plan without proper consideration of recent or future legislation, new laws could lead to unintended consequences and even tax inefficiencies. Our attorneys regularly lead seminars and advise clients about planning during uncertain times, and we are fully prepared to discuss the potential ramifications with you.
While tax minimization is a result that most clients would prefer, non-tax-related estate planning issues and objectives may be even more important for many of us. In today's litigious and bureaucratic social climate, a thoroughly-considered estate plan is vital to a family's future. Careful planning can help ensure: (a) that the time leading up to your death is less difficult and stressful for your family, (b) that your estate is able to be settled in an efficient and cost-effective manner, and (c) that your beneficiaries are protected against subsequent lawsuits or divorce. These issues are central in the planning efforts that our attorneys undertake with clients.
Put your renewed focus on family and health to good use. Move estate and related planning to the top of your 2021 resolutions list. There is no time like the present to implement or update a plan that will be meaningful to your family.