San Diego Estate Planning, Trusts and Such … Trends on the Horizon?

From the Desk of Kristina R. Hess, Del Mar Trust Attorney, San Diego Estate Planning Group…

Attention, San Diego Families!  The number of issues that can have an adverse effect on your estate plan can be overwhelming…

Even the best laid plans can be rendered null and void by one piece of legislation.

If you have an estate plan in place and you haven’t looked at it in a while, you could have provisions in place that are at best, pointless and at worst, can cost your estate a lot of money.

Regardless of the value of your estate, you should at least have a will and you need to take steps to ensure that your will legally does what you intended.

The best course of action is to maintain an ongoing relationship with a good estate planning attorney to make sure that you’re keeping all your paperwork in order and staying apprised of issues that can hurt you in the long run.

Just to give you an idea of how quickly things can change, here are a few trends you need to keep your eye on:

1. State Tax Increases

The federal government isn’t the only one that’s going broke.  State governments are facing serious funding shortfalls as well.  When they’re coffers get low, the first thing they do is start looking for ways to increase their tax revenue. Expect changes in state income taxes, inheritance taxes, sales taxes, etc. and plan accordingly.  If you plan to move to a state considered a tax haven, make sure your estate plan is modified accordingly.

2. Estate Tax Savings Mechanisms Removed

Expect tax savings estate planning mechanisms that have been used forever to go away.  Grantor Retained Annuity Trusts, Family Limited Partnerships, even Irrevocable Life Insurance Trusts could be restricted.  Now is this time to establish and fund trusts before they can be eliminated.  Ask your estate planning attorney to keep you advised of any changes to the viability of these estate planning techniques.

3. Income Tax Planning as a Major Component of Estate Planning

The ways in which individual wealth is held have changed significantly over the last 20 or 30 years.  IRA’s and annuities are becoming more and more popular choices for retirement planning and, eventually, as part of individual estates.  To make the most of these savings vehicles and ensure that you pass as much of your money on to your estate as possible, you need to plan carefully to minimize income tax exposure.

4. An Increase in Probate Litigation

People sue over everything, including estates.  The traditional 2 parents, 2.4 children family is no longer the norm and that means you’re adding stepchildren, half-brothers and sisters, and possibly second or even third spouses into the mix when planning your estate.  These relationships and providing for everyone fairly can be tricky.  Making sure your estate plan is current at all times is vital to keeping your future heirs out of court.

5. Longer Lives Means Less Inheritance

We’re living considerably longer than our parents and that means our retirement savings has to last that much longer.  Chances are, your children could be approaching retirement age by the time they inherit anything from you.  Make sure you’ve planned properly to make your retirement funds last as long as you need them.

Any of these issues can wipe out your well laid plans and hard earned funds.  You need to keep an eye on your estate plan and an eye on the horizon to plan for any changes in estate planning laws.

A good estate planning attorney can advise you not only during the actual drafting of the paperwork but keep you apprised of changes you need to address in your plan in the future.  Hiring an estate planning attorney shouldn’t be a one shot deal.

Call us to schedule your Family Wealth Planning Session today.  Our Family Wealth Planning Session is normally $750, but this month I’ve made space for the next two people who mention this article to have a complete planning session with me at no charge.  Call Sarah Kerr at 858.794.1426 today and mention this article and she will see if we can get you in to see me in April.

Create Legacies Today,

Kristina Hess