Estate Planning Considerations for the New Year

It's a new year and a new decade. It's the right time to review and update your estate plan.

BrownWinick’s Estate Planning Group has three key goals — to ensure our clients and their families:

  • are protected during life (powers of attorney);
  • have a plan for minor children (guardians); and
  • transfer assets in an efficient and organized manner (wills and trusts).

As we begin a new year (and a new decade), here is a list of items that may trigger a review or update of your estate plan.

  • Updated Balance Sheet – As you create or update your balance sheet, consider sending it to your estate planning attorney so that all assets are included within your plan.
  • Important Life Events – Births, deaths, health events, marriage, divorce, raises, moves, and other events may necessitate a call to your estate planning attorney.
  • Five-Year Review – We recommend clients review their estate plan every five years to determine whether any changes are needed. Over the years, laws change, beneficiaries mature, fiduciaries need updating (power of attorney and executor/trustee), and your estate planning preferences evolve.
  • Beneficiary Designations – One or more of your accounts likely has beneficiary designations (life insurance, IRA, 401(k), brokerage accounts). Unless you take action, your Will and/or Trust may not control who receives the assets in these accounts. Review your beneficiary designations to ensure they align with your estate plan.
  • SECURE Act and Stretch IRAs – Most non-spousal beneficiaries can no longer stretch inherited IRAs over their life. Rather, the full value of the inherited IRA must be paid out within ten years of the original account owner’s death.
  • Living/Revocable Trust Funding – A benefit of a Living Trust (also known as a Revocable Trust) is the avoidance of probate. Probate is only avoided if your trust is fully “funded.” This means that all assets are either owned in the name of the trust or pass by beneficiary designation/operation of law.
  • Increased Unified Credit – In 2020, all U.S. citizens may pass $11.58 million dollars to non-charitable beneficiaries without paying federal estate tax. Importantly, this amount is set to automatically reduce to $5 million (adjusted for inflation) on January 1, 2026. We’ll also pay attention to the value of the unified credit during the upcoming election cycle.
  • Low Interest Rate Environment– The current low interest rate environment is attractive for intra-family loans/sales and asset freezing techniques.
  • Business Operations and Sale – Clients owning or investing in closely-held businesses may experience changes in business valuation, operations, or owners. Consider whether any changes impact your estate plan.
  • Buy-sell – If you own an interest in a private company, you should confirm the buy-sell adequately protects you and other co-owners during life and at death.

If you have any questions about your estate plan, feel free to call your BrownWinick attorney or BrownWinick’s Estate Planning Group. A quick review of your plan ensures you and your loved ones are properly protected as we start a new year. 

Contact Information:

Robert Hodges  (P) 515.242.2465  (E)
Katheryn Thorson  (P) 515.242.2484  (E)

This article was written for general informational purposes and summarizes the tax laws. As such, it should not be relied upon for compliance with the Internal Revenue Code.

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