Estate Planning Resolutions for the New Year.
- Update the old will or trust that you have been procrastinating about. If it is more than 10 years old, the tax provisions no longer work in most cases. Make sure your personal representative or successor trustee is still up to the task.
- Plan for state estate taxes in states like Oregon ($1 million exemption) and Washington ($2,193,000 exemption). Lifetime gifts do not count against state estate tax exemptions in these states.
- If you have grandchildren, consider funding college savings plan accounts. Start when the grandchild is born and contribute to the accounts each year – more for the older grandchildren.
- Establish a Family Giving Account (i.e donor advised fund) at an investment firm (i.e. Fidelity, Schwab etc) or at a community foundation like Oregon Community Foundation. Bunch your donations so you can itemize, obtain your charitable tax deduction and then gift out of your fund over several years to your favorite charities.
- Make an inventory of your assets, accounts and passwords or use a third party password manager. Take photos and get appraisals of any collections, or family heirlooms.
- Consider a gifting plan to your children. Start small and see how they use your gifts. You have to file a gift tax return if you gift over $15k per person but no gift tax is paid unless you gift more than $12.06 million total over your lifetime. Couples can double those gifts. Consider a loan to help a child with a down payment for a condo or a house so they can build some equity in real estate.
- The federal estate tax exemption expires on 12/31/25 so if you own a business or have a lot of real estate, plan for a 50% drop in the $12.06 million exemption by accelerating gifting. Take into account the loss of the step up in basis on death with a gift.
- Talk to your family about your values and what is important to you. Estate planning is more than transferring your property and investments at your death. If you are interested in education, donate to a scholarship fund. If curing disease is important to you donate funds in your will or trust for research. Involve your family in the process and they will learn more about you and appreciate your values.
- Create a memory. In 1974, my 96-year-old great-grandmother gave me a silver candlestick to take back to my father. She lived in one room in a retirement home outside of Paris and she rummaged through her armoire to find the item, which she said, dated from Louis XVI. My memory of “Meme” is associated with the candlestick every time I pull it out to look at it. Give personal items to children and grandchildren that are important to you and to the family now while you are alive so that you can enjoy them together. Write down the story in a letter so they have it.
Good luck with your New Year’s resolutions and best wishes for 2022!
Rob Le Chevallier
Rob Le Chevallier practices business law, business formation, estate planning, trust administration, real estate law, and corporate financing at Buckley Law P.C. He particularly focuses on the estate planning needs of business owners and other high net-worth individuals and their families. He is an attorney and shareholder at Buckley Law and is licensed in Oregon and Washington.
The information contained in this article is for informational purposes only and does not constitute legal advice. This information is not intended to create an attorney-client relationship, and the receipt or viewing of it does not create or constitute an attorney-client relationship. You should not act upon any information contained in this article without consulting an attorney for individual advice regarding your own situation.