Issues for property planning for 2021

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Considerations for estate planning for 2021

Tuesday 29 December 2020

The holiday season is about to come and go, and many of us will be glad to turn the page in the unprecedented year 2020.

In retrospect, it is easy to focus on the negatives of a year, which presented greater public health challenges, political divisions, and economic uncertainty than most other years recently. But hopefully these lows have a silver lining: a renewed focus on what is really important to us.

If ever there was a time to make meaningful New Year’s resolutions with an emphasis on the future and the well-being of ourselves and our families, maybe it is now. Rather than getting an online fitness membership or pretending that you would like to eat salad this year, let’s make up our minds to secure our family’s future by planning the unfortunate inevitables of incapacity for work and death. There is no time like today to evaluate the estate planning that we have (or have not) done.

Relevant considerations for you and your family can include:

  • What changes in federal economic and tax policy are likely to result after the recent elections, and how could a new policy affect or undermine my existing estate planning?

  • Do I have a power of attorney and a living will to express my wishes and enable my family or agents to make financial, business, and health decisions if I am unable to make them?

  • Is my current estate plan structured to promote efficient administration and minimize family hassle and expense or even controversy upon my death?

  • Have my adult children completed the necessary basic legal documents to enable me to assist with their affairs in the event of an accident or illness?

  • Given the latest legislation, will my qualified retirement accounts be given to my beneficiaries in a protected and tax efficient manner?

  • Have I implemented a schedule that will allow my company to continue working after my inability or death?

  • Are my assets structured to limit my risk of potential liability?

Significant changes in tax law; Past, present and future

In 2018, significant changes to the federal law on gift and estate tax came into force. More recently, Congress passed law to significantly change the way in which income tax deferrals are allowed on inherited retirement accounts. And now, with government stimulus spending and a changing political landscape in Washington, DC, one can assume that (i) additional changes are on the horizon and (ii) those changes may not be “friendly” to many taxpayers. For those who implemented their estate plan without proper consideration of recent or future legislation, new laws could lead to unintended consequences and even tax inefficiencies. Our lawyers regularly lead seminars and advise clients on planning in uncertain times. We are ready to discuss the possible implications with you.

Not tax concerns

While minimizing taxes is an outcome most customers would prefer, the questions and goals of non-tax estate planning may be even more important to many of us. In today’s contentious and bureaucratic social climate, a carefully thought out estate plan is vital for a family’s future. Careful planning can help ensure that: (a) the time leading up to your death is less difficult and stressful for your family, (b) your estate can be settled efficiently and inexpensively, and (c) that your beneficiaries are protected from future lawsuits or divorce are protected. These questions are central to our lawyers’ planning efforts with clients.

Suggested action

Put your renewed focus on family and health to good use. Move estate and related planning to the top of your 2021 resolution list. There is no time like today to implement or update a plan that matters to your family.

© 2020 Ward and Smith, PA. All rights reserved.National Law Review, Volume X, Number 364