Estate planning is more than “who gets what”

In the arena of estate planning, avoiding unnecessary court involvement, preserving privacy, maximizing income tax deferral planning (IRA’s), planning to ensure availability of government benefits (Medicaid), and structuring affairs to ensure assets stay in the family bloodline (Bloodline trusts) are the big areas we address for most of our clients. Most people are not affected by the federal estate tax since the federal estate tax exemption will be 15 million per person in 2026; and 30 million for a married couple.

Retirement accounts are creatures of the law.

As such, they are subject to many rules such as when you must begin taking out distributions and how much you must take (and therefore pay tax on). When one passes, the beneficiary designation on file with the administrator or custodian controls. The beneficiary has settlement options that they should consider before making any decisions. It is advisable to seek professional guidance on your settlement options, and which choice is best to take. We usually try to structure these assets so as to preserve income tax deferral as much as the law permits.

Government benefits are a lifeline to those in need.
Planning in advance so as to qualify for needs-based programs is critical to success in this arena can be the difference between someone who gets care and someone who does not get care. Making sure your agent can do this kind of planning is also critical. If the person who needs it is disabled, nothing can be done absent express specific authority to the contrary.

The law recognizes “future interests” so you can direct that a child inherits your property for their use and benefit (in trust) .... and then when they pass on, it goes to your blood descendants, and not to your in-laws. Informed clients usually opt for this. The good news is we can make sure the in-law will not get it in a divorce or at death, and we can shelter it from estate taxes in the child’s estate and remove it from exposure to creditors’ claims.

Good estate plans will address all of the issues raised above.

Mark F. Winn, Master of Laws (LL.M.) in Estate Planning, a local asset protection, estate planning and elder law attorney. www.mwinnesq.com