10 Estate Planning Success Tips

Though the terms have changed dramatically over the past decade, estate taxes continue to be in force.

10 Estate Planning Success Tips In 2001, legislation was made to phase-out estate tax by raising exemption levels over time. But currently, there is still a federal estate tax in effect. The threshold for imposing this tax was raised to $1 million per person for people dying in 2003, and the estate tax was scheduled to disappear for only one year - 2010. In 2011, the estate tax was scheduled to reappear and in 2013, the American Taxpayer Relief Act (ATRA) made most of the 2010 changes permanent, though the estate tax rate increased. In 2015, estate tax, generation-skipping transfer tax exemptions, and gift tax terms were made even more beneficial and all three were re-configured to take inflation into account between 2012 and 2015. So, though the terms have changed dramatically over the past decade, while estate taxes continue to be in force, we recommend that you take the following actions to protect your assets! 1,2

1. Keep your will or trust up to date. A will states where assets that are outside of a trust are to be transferred. Many state laws invalidate any will made prior to a major life event, such as marriage, divorce, moving to a new state, or the birth or adoption of a child. Keep your legal residence address, marriage status, beneficiaries list, etc. updated and make sure you have a trusted executor to carry out your wishes, ideally an estate lawyer. 1

Consider including a living will or advance directive as part of your estate planning to dictate how you’d like medical decisions to be made should you be incapacitated. Discuss these issues with your family in advance as well as with your medical power of attorney so that everyone fully understands your wishes.1

2. Name a dependable executor and/or trustee. Executors are called upon to collect assets, pay obligations, and distribute your assets. A trust is a legal device that allows you to exert greater control over your assets post-humously. You can name yourself as a trustee while you’re still alive and in your absence, you can name a trusted successor to watch over your trust and distribute assets without having them pass through public probate. Your trustee must enforce all the provisions of any trusts you created. Choose people who have the knowledge, integrity and stamina in the face of pressure from family members to fulfill these obligations.1,5,7

3. Keep track of beneficiaries for all of your IRAs, qualified plans and insurance policies. Do you know who your beneficiaries are for these assets? If you don’t, they may be going to someone you no longer wish to receive them. You can easily change the name of the person who will receive their benefits by filling out a form.5,12,14

4. Maximize the liquidity of your estate. Liquidity is defined as the ability to quickly turn assets into cash. Without sufficient cash to pay taxes, funeral, and other expenses, your family may have to sell illiquid assets - such as a family business or other property - at an inopportune time. Avoid putting your family in the position of selling off the estate in a hurry by providing for sufficient liquidity. Make sure there are sufficient liquid funds in your estate to cover initial expenses associated with your passing.6

5. Maintain an Appropriate Mix of Investment Risk. It’s detrimental to have too much money allocated to risk in stocks or mutual funds, as a percentage of total cash assets and age. Over time, more risky investments should be moved into safe and stable investments such as Annuities.

6. Explore the ramifications of joint asset ownership with your spouse. This ties in with the estate tax issues in item 1: if your joint net worth exceeds $1 million, you might want to consider owning some assets separately as part of your overall estate plan.2,7

7. If you have minor children, consider naming one guardian for your minor children and a separate guardian for the property you’ve left to support them. The best guardian for your children may not be the most effective money manager you know. Just be aware that the person you’ve chosen as guardian of your children, can be a different person than the guardian that manages your children’s property.1

8. Estate planning for your spouse or other sole survivor scenarios. If your net worth is high enough, your estate may be subject to taxes. A simple estate plan can save some individuals hundreds of thousands of dollars in estate taxes. 2,7

9. Leaving the right assets to the right people. If your child was a "special needs" child, you would not leave him money to handle on his own. Consider creating a trust for special needs children and make sure your teenager or other dependents, receive much needed management along with the cash. 5,7

10. Plan, Plan, Plan. The future is in your control. Decisions you make about how you structure your estate will affect your family. Until you’ve taken action, you don’t have an estate plan, but don’t be overwhelmed. Nothing is irreversible, and you can take small steps to put your plan into place. Planning is most important for business owners, who must plan for the succession and/or buy-out of their business.


1 - money.usnews.com/money/personal-finance/family-finance/articles/2017-07-14/10-essential-estate-planning-tips-everyone-should-know

2 - thebalance.com/overview-of-2010-estate-tax-and-gift-tax-rules-3505654

3 - thinkadvisor.com/2019/03/11/top-10-estate-planning-tax-facts-for-2019-you-need-to-know

4 - invensis.net/blog/finance-and-accounting/5-ways-improve-liquidity-ratios/

5 - bankrate.com/investing/what-is-a-trust/

6 - yourestatematters.com/estate-liquidity-estate-planning-objective

7 - money.usnews.com/investing/investing-101/articles/2017-10-23/7-estate-planning-mistakes-you-cant-afford-to-make