So what do we do as planners when we don’t have that crystal ball? How do we help our clients in the face of uncertainly – not knowing if the unified credit goes back to the $1 million level as tentatively scheduled or if transferred assets receive a step-up or end up with a carry-over basis? My advice is to control what you can and build in enough flexibility (when possible) to adapt for probable change.
What can be controlled are the prudent, estate-planning actions not directly linked to transfer taxation. These include:
- Ensure estate planning documents are current (e.g., Will, living directives)
Check beneficiary designations (e.g., insurance contracts, retirement plans)
Review titling of property
Provide for estate liquidity (possibly with life insurance)
Provide for survival needs (possibly with life insurance)
Use of the annual gift-tax exclusion
Life-time gifting (you know the cap is $1 million)
Use of trusts (if the intent is professional management of funds)
Your comments and ideas are appreciated....