Post 2010 Tax Act Estate Planning Tips

Post 2010 Tax Act Estate Planning Tips

By by Martin M. Shenkman, CPA, MBA, JD

Checklist - Post TRA Estate Planning Ideas

Estate planning is not over, only different. Consider:

√  State estate taxes. In decoupled states the cost of state estate tax could be substantial. While state estate taxes will not justify the extensive and costly planning a 55% federal estate tax would have, the costs are not insignificant and planning in appropriate states is warranted.

√ Residency/Domicile for a client is significant for the determination of income tax, trust situs for non-grantor trusts the client has established, estate taxation (or avoidance), and interpretation of the client's will.

√ Income, capital gain, dividend, and other tax planning considerations under the TRA. Asset location, Roth conversion, and a myriad of other decisions have been affected.

√ TRA's generous estate tax changes disappear in 2013, so planning for that possibility, however low, a client may view the likelihood could be valuable.

√ Asset protection was pre-TRA and will remain post-TRA significant. However much the tax laws gyrate, malpractice, divorce, premises liability, and other risks can decimate an estate far worse than any tax.

√ Planning for a child or other client family member or loved one with special needs or special health issues. Approximately 120 million Americans live with chronic illness, yet most plans give scant attention to the issues they face.

√ Preventing elder financial or other abuse. The mere fact that this issue has a name, "elder financial abuse" suggests how common the issue has become, and how important to plan for.

√ Budgeting. Many, perhaps most, wealthy clients view "budgeting" as a four letter word. But a the recent economic disruptions demonstrated, budgeting remains the foundation of every financial plan. A financial plan is the foundation for investment planning. And all of these are critical to properly addressing estate planning, whatever the tax system provides.

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