Conduct a comprehensive review of bypass or shelter trusts. Because of this year’s unusual estate tax situation, these trusts – designed to pass to heirs without estate tax on the underlying assets or their appreciation – warrant extra review. Under normal estate-tax circumstances individuals add a “formula” clause to revocable trusts or wills, to ensure that the maximum amount of assets that could be passed free of estate tax are distributed to a surviving spouse for their lifetime and, if both spouses agree, to other beneficiaries at the second spouse’s death. If that formula clause isn’t properly adjusted, a spouse could be unintentionally disinherited.
Review and update the will in light of estate planning needs. Some wills may not be structured to properly and efficiently dispose of non-trust assets – or may be in conflict with the needs or wishes of heirs.
Review beneficiary details. One mistake of well-intentioned individuals is failing to update beneficiary designations, contact information and proper signatures on accounts for heirs. Check retirement accounts, insurance policies and any assets not distributed through a will or trust.
Individuals or couples with young children should name a guardian-and alternate to care for the children in the event of the death of a single parent or both parents.
Stephanie Enright is a consultant at Enright Premier Wealth Advisors of Torrance. Write to her by e-mail at [email protected] or by fax at 310-316-0401.
