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    Estate & Probate » Blog » Four Critical Steps for Efficient Estate Planning

    Four Critical Steps for Efficient Estate Planning

    Estate planning is rarely as easy as people think it will be. Even after appointing the trustee of an estate or a personal representative, there are often other nuanced decisions that must be made about how your estate plan should be handled. Failure to properly address these challenges now could lead your loved ones to face countless obstacles after you pass away or become incapacitated. Fortunately, by completing some additional assignments now, you can avoid many of these obstacles. The following reviews just some of the strategies that you can follow to achieve your estate planning goals.

    Sign Any Documents You Can Now

    You should make sure you have signed all of the documents signed by your bank and financial lender that you can now while you are fully competent. Even when power of attorney documents are involved, a person is still required to sign these documents. Signing these documents now increases the odds that the distribution of your assets will proceed as smoothly as possible after you pass away and that your loved ones will receive assets as quickly as possible. Beneficiaries, however, should still be prepared to wait at least six months and often as long as a year before an estate can be closed and assets distributed.

    Make Sure All Account Requirements are Satisfied

    Be careful to review any financial or end of life accounts to make sure the associated requirements are satisfied. For example, long term care insurance often requires a release before a representative can pursue a claim. Additionally, funeral plans often require a person to sign an authorization for final disposition of last remains, which addresses how a person’s remains should be laid to rest as well as what rituals or events should be held in honor of the person’s passing.We have all received holiday gifts we secretly did not want or that did not fit us at all. In the same way that mistakes are a common occurrence when people gift Christmas presents, mistakes are also common when people make gifts as part of an estate plan. While there are many complex estate planning laws, by mastering them you can maximize the amount of assets that you pass on to loved ones. The following reviews just some of the critical strategies that you should remember to follow if you plan on gifting assets to a loved one this holiday season.

    Consider Waiting Until Early in the Year

    Many people gift during Christmas and the end of the year, but in reality, it is better to pass on gifts early in the year. By gifting early, the year’s gains are transferred to the beneficiary’s tax status. Additionally, by gifting early in the year, you make sure that you have ample time to carefully choose and plan the gift. Consider waiting a month or two and avoiding a rushed gift this holiday season.

    Plan Carefully for Appreciated Assets

    Many people write checks when making gifts as part of an estate plan, but it is often better to assess your property and determine which assets are best to gift. Understand that when you pass on appreciated property to someone, that individual takes the same tax basis in the property that you had. After the property is sold, a person is taxed on the appreciation that occurred during ownership of the property. After the appreciated asset is inherited, a beneficiary increases the tax basis to fair market value. All appreciation during asset ownership avoids capital gain taxes. This means that sometimes it makes more sense to hold an appreciated asset in your estate so a loved one later inherits it because these gains avoid taxes. This also might mean that you pass on an asset that is likely to appreciate substantially but has not yet done so.

    Avoid Investments With Losses

    When you gift an asset that has decreased in value, the beneficiary’s tax basis is either the donor’s tax basis or the current fair market value, based on which is lower. Neither person deducts the loss. If you sell the asset, however, you can both deduct the loss and transfer money from the sale to the beneficiary.

    Make Unlimited Tax-Free Gifts

    Some types of gifts can be tax-free in unlimited amounts. For example, education gifts fall in this category, but it is important to remember this tax-free unlimited exception does not apply to funds spent on materials associated with an education like books and lodging. Education gifts also must be made directly to an educational institute rather than the beneficiary. Similarly, medical gifts also can be made tax-free and an unlimited number of times.

    Speak with an Experienced Estate Planning Attorney

    The estate planning process is a complex one, but an experienced attorney can help you create a plan that is capable of achieving your goals. Contact attorney Jim A Lyon today to schedule a free case evaluation.

    Remove Your Name From Mailing Lists

    One of the most overlooked end of life tasks that can greatly save time for your loved ones is removing your name from all of the catalogs that you receive. This matter is often made even more complex because companies sell these lists to other advertisers, which can lead to a person receiving a great deal of mail. While this might seem like an insignificant task, your loved ones will greatly appreciate your ability to complete this task while you are still alive instead of leaving them to handle it after you have passed away.

    Review Your End of Life Plan With Your Attorney

    Based on your individual financial accounts as well as other unique details about your estate plan, it is a good idea to speak with your lawyer about the nuanced decisions surrounding the end of your life. Through adequate forethought now, you can make matters substantially easier for your loved ones after they endure the difficult process of losing you.

    Speak With a Compassionate Estate Planning Attorney

    The estate planning process is complex, but an experienced estate planning lawyer knows what it takes to make sure that your various goals are achieved. Contact attorney Jim A Lyon today. During a free case evaluation, attorney Lyon can discuss your available options to achieve each of your estate planning goals.

    Ethan Moran
    Ethan Moran
    09:36 28 Dec 22
    To my wife and I, our probate case was complicated. Not to Jim! He made it look so easy, and his attention to detail is incredible. Highly recommend to anyone seeking an estate planning lawyer.
    Philippe Joshua
    Philippe Joshua
    17:56 30 Nov 22
    Jim's firm was referred to me by a friend who knew I was looking for an estate planning lawyer. I can't say enough good stuff about him. He's genuine, thorough and highly skilled. Strongly recommend.
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    Estate & Probate » Blog » Four Critical Steps for Efficient Estate Planning