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Estate Planning

Proper estate planning can alleviate additional stresses, feuds and complications after your passing. Key to that is communicating to ensure proper measures are taken to fulfill your wishes, and working with professionals can help you protect your assets.

Think about how you want your legacy to live on. Do you want to donate to charity, ensure your children and family are taken care of, or pay for your grandchildren’s school expenses?

Although no one likes to think of death, having a will can ensure your legacy lives on and your loved ones are taken care of. Proper planning can alleviate additional stresses, feuds and complications after your passing. Key to that is communicating to ensure proper measures are taken to fulfill your wishes, and working with professionals can help you protect your assets.

Here are five key takeaways to ensure your estate is in order:

1. Talk to your CPA, wealth management adviser and attorney. Your CPA can educate you on tax and legal structures and advise you on how best to provide for your beneficiaries while minimizing the tax consequences. “The estate tax is a tax on your right to transfer property at your death,” according to the IRS. “It consists of an accounting of everything you own or have certain interests in at the date of death.” Proper planning can help avoid almost half of your assets going to the government after passing away.

2. Make gifts while you are living. Doing so can help you take advantage of some tax savings and reduce your total gross estate. Gifts can be made valued up to the annual gift tax exclusion amount each year without ever touching the lifetime estate exemption.

Consulting your tax adviser can help determine which assets should be distributed when – before or after death – to help beneficiaries receive the most benefits, which includes tax savings. While some assets should be distributed while you are still living to take advantage of gift exclusions and reductions to taxable income, others should remain in the estate to benefit from an increase in value.

3. Find out your net worth. Evaluating net worth – either personal or business – with your accountant can help determine what your beneficiaries will be responsible for after death, whether filing an estate tax return will be necessary, and how to maximize your exemptions and deduction if required to file.

4. Determine who you trust to run your estate, and appoint an executor to help carry out your wishes. This person can be any one you want: a spouse, child, adviser, partner, friend, etc. Appointing someone you trust can be key when hard decisions need to be made regarding residual assets or where money in the estate needs to be spent.

It’s also important to have your will include a line of possible executors in case your original appointee precedes you in death, declines to accept the position or becomes mentally incapacitated.

5. Don’t be afraid to adjust your wishes. Legal estate documents are filed and notarized but not set in stone. Changes can always be made: life happens, new family members are added, wishes change. Just because you are leaving your estate to an heir doesn’t mean you can’t still enjoy your time left.

Periodically update your accounts, especially after major life events such as death, marriage or births, to ensure assets aren’t distributed to the wrong people, which can cause hassle, confusion and even lawsuits after death.

The Ericksen Krentel team can advise you on the following documents and structures to ensure your affairs are in order:

  • Living trusts
  • Testamentary trusts
  • Wills
  • Marital trusts
  • Charitable trusts
  • Generation-skipping trusts
  • Private foundations
  • Lifetime gifts
  • Various retained income trusts
  • Limited Liability Corporations or partnerships

From a tax perspective, we can assist in preparing Forms 706, U.S. Estate Tax Return and all related state returns; fiduciary income tax returns – federal and state – for trusts, estates, conservatorship, private foundations and charitable remainder trusts; and trust accountings and accompanying financial statements.

Sometimes a family member named as the trustee or executor is unwilling or unable to carry out the responsibility. We help by providing an appropriate level of service to ensure obligations are met timely and appropriately. Our team also can assist executors and/or trustees in carrying out the wishes of the deceased as stated in his/her will or trust, including:

  • Financial accounting and reporting
  • Inventory of assets
  • Notice to banks or brokerages and insurance companies
  • Preparation of tax returns
  • Distributions to beneficiaries

Our team of experienced CPAs can also help you compile a comprehensive and confidential financial analysis, analyze every aspect of your current financial picture in conjunction with the current legal, tax and economic climate and identify any weaknesses in the current program and provide specific recommendations for improvement.

If you’d like to learn more about creating – or updating – your estate plans, including determining your net worth and the most beneficial way to distribute your assets, please contact us today.


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