A New Year Means a New Estate Plan

Gabriel Katzner - January 21, 2020 - Estate Planning
San Diego Estate Planning attorney

Welcome to 2020! A new year is a time for optimism and new opportunities. It’s time to start fresh! But making New Year’s resolutions is not enough; you’ll also need to take action to make sure you and your loved ones are prepared for anything the future might bring.  

Create a New Estate Plan in the New Year

A new year is a great time to put an estate plan in place. Having a comprehensive plan designed with the help of an experienced estate planning attorney can provide peace of mind, both for you and for the loved ones you will eventually leave behind. In addition, you can also make plans for your own care in case you become unable to care for yourself. By having a well-thought-out estate plan, you can avoid:

  1. Decisions that don’t align with your wishes. If you do not have a will or trust that names the people you want to receive your money and possessions, they will be given to the people determined by state law, and these may not be the individuals you would have chosen. You can also name a person you trust to act on your behalf if you become too ill to make decisions for yourself using medical and financial powers of attorney. Without these tools, someone you do not have confidence in could be appointed by the court.
  2. Confusion and disputes over who will care for your children. You can name a guardian you trust to provide care for children or dependents in your estate plan. Otherwise, this decision will be up to a court. If you choose to create a trust—instead of giving the caretaker the money outright to be used for your children’s benefit– you can make sure the funds are only distributed for the children’s care. In the absence of a trust, there is no guarantee the named caregiver will use the money in the way you would have wanted. In addition, if the caregiver has any debts, giving them your money could expose those funds to claims by their creditors. With a trust, you can ensure that your money will be used only in the way you have chosen.
  3. Costly, time-consuming, and public probate proceedings. If you do not have an estate plan or only have a will, your money and property will have to go through a court-supervised process that transfers them to your heirs. Even for smaller estates, this process could cost lots of money in attorneys’ fees and court costs. Probate may also require court approval for every step in the process, which can take months or years to complete, especially if any disputes arise. Like all court proceedings, probate hearings and documents are accessible to the public, so anyone can see your will and the details of your family transaction. This can be avoided with a revocable living trust. With a revocable living trust, you transfer your assets to the trust before your death, making the trust their legal owner instead of you. This eliminates court proceedings, and, since you’ll name yourself as the trustee, you can retain control over the money and property during your lifetime.
  4. Depletion of your estate by creditors. To protect your money and property from creditors, you can create certain types of irrevocable trusts. Similarly, if you are concerned that your heirs may have creditors that will look to the inheritance to satisfy their claims, you can make your heirs the beneficiaries of an irrevocable trust instead of making outright gifts to them. Because the trust owns the property and money, and the trustee controls when and how much the beneficiary receives, the beneficiaries’ creditors will not be able to reach it unless a distribution is made to them.
  5. Family discord. During the estate planning process, you can explain to your family why you have made certain choices about how and to whom your money will go and who will act on your behalf if you are sick or incapacitated, which may help to avoid disputes between your family members. This is especially important if the gifts are not equal or if there’s an unequal interest in certain family businesses or heirlooms. In addition, if you create a trust, individuals that you choose to exclude will not have access to the trust document and will be less likely to contest it. If you are concerned that naming one of your children as the executor or trustee will lead to squabbles, you can choose an impartial third party to act in those roles.
  6. High estate taxes. Under the tax law changes enacted in 2017, the amount that you can give away both during your lifetime and at death without incurring transfer taxes is quite large (for 2020, the lifetime exemption for an individual is $11.58 million). In addition, a surviving spouse can benefit from the unused exemption amount of their deceased spouse’s estate if an IRS Form 706 is filed. For 2020, the exemption is $23.16 million per couple. State estate and inheritance taxes could still be applicable for estates, certainly this is the case in New York, so it’s absolutely something to be addressed. We can help you find strategies that maximize your tax savings.

Review an Existing Estate Plan

It is important to review the estate plan you made in the past, no matter how long ago, to make sure it will still accomplish your estate planning goals.

  1. Think about what has changed in your life and if there are aspects of your estate plan that need revision. If you have experienced a change in your marital status, a new child has been born, your financial status has improved, a beneficiary has died, or the person you have named as trustee is ill, you’ll need to update your existing estate plan. Even if you think nothing has occurred that would affect your plan, it is wise to meet with us on a regular basis to ensure that your plan will still meet your goals. 
  2. Changes in the law may impact your estate plan. As estate planning attorneys, we stay up to date about changes in state or federal law that can impact your plan (just read our blog post about the SECURE Act – the biggest change to retirement planning in a lifetime). Let us help you ensure that changes in the law have not reduced the ability of your plan to achieve your goals. 

Let Us Help You Make a Great Start to the New Year!

The new year is all about new beginnings. Take steps today to make sure plans are in place for your own care and the protection of your family. Contact us to set up a meeting and let us help you start the new year off right.

You can use the link below to schedule a call with Gabriel Katzner, or just call us at 855.528.9637 to learn more about how best to plan today to protect those most important to you





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