Reason to update an estate plan

Some Charlotte residents might want to revise their estate plan given the changes to estate plan exemptions that were part of the tax bill passed in December 2017. The 2017 exemption limit for couples was $10.9 million, and some people might have designed their estate plans to try to avoid or reduce additional taxes. Vehicles such as life insurance trusts and credit bypass trusts might have been created for this purpose. The new exemption limit for couples is $22 million, and most people will no longer need those tools. However, reviewing an estate plan periodically is important for everyone regardless of their income level.

For example, people should make sure they have health care and financial powers of attorney in place and that they are still happy with the people they have chosen for these roles in case they become incapacitated. They might also want to review their beneficiary designations, such as those on retirement accounts and insurance policies.

People might also want to think about their goals and whether their estate plan could be redesigned to better meet them. For example, a trust can give people control over how and when their assets are distributed. A person could create a trust to take care of a special needs relative or simply to skip the probate process and pass on assets more quickly.

Trusts are not just for very wealthy families. Choosing the right trustee can be an important aspect of creating a trust. The trustee may be responsible for deciding when a beneficiary receives assets as well as managing the trust, so it is important to choose someone who is trustworthy and deals with conflict effectively. One common error with trusts is failing to transfer assets into them, so people should also make sure this important step is included.