Posted by Elliot Kravitz, ATP

Top 8 Helpful Non-traditional Estate Planning Tips

Top 8 Helpful Non-traditional Estate Planning Tips

For centuries, estate planning and asset management of clients have been overseen by financial advisors. However in recent years, for finance pros and their clients to stay on top of trends to make the best decisions, they must expand their knowledge by looking closely at the new asset types and the new laws that are recently implemented.

Certain important considerations that weren't on the radar just a few years ago must be overlooked by finance pros and their clients with technology and international law changing the game faster than ever before. Below are some things that you should remember when it comes to asset management and estate planning.

1. Estate Tax Planning

Because of the $11.4 million exclusion for the estate tax, many people misunderstood with the thought that their heirs won't have to pay it and therefore they fail to plan for it. However, in 2025, this exclusion is set to revert to $5.5 million and the political leanings of Congress are where it depends whether it will go lower. A result in cents on the dollars being passed to heirs will be possible since retirement assets are estate-taxable and income taxable. 

2. Before Letting Life Insurance Lapse, Check Your Options

To pay estate taxes back to the carrier, many seniors are surrendering the life insurance they bought with the situation that the estate tax exemption now worth $11 million for an individual and $22 million for a couple. Before surrendering the policy for little or no return on investment, it should be considered and valued as an option since most seniors' life insurance is much more valuable as a life settlement transaction. 

3. Your Living Trust should be Funded

You need to fund the living trust that is prepared by an attorney in order to move your assets into the trust and avoid probate. Changes to terms and beneficiaries and move assets in and out will be possible with a revocable living trust. Changing the title on assets to the name of the living trust is the act of funding the trust. 

4. Easy Simple Things

The way to reduce or avoid tax in the past was to set up a series of trust when a person died. However, when a loved one dies, the complexity of distributing assets into different legal structures was made easier by the current law. 

5. Important Passwords should never be forgotten

Ideally, digital/cyber assets should be addressed. It would be less frustrating if you will create a book to store your passwords and knowing wishes in advance. Passwords for online banking, which includes bill pay and auto withdrawals; mobile devices such as laptops, cellphones, tablets. etc; social media profiles (Twitter, LinkedIn, Facebook, Instagram, etc.); and of course, email accounts. 

6. Through an Inherited Roth, Increase your beneficiaries' tax-free income

From an inherited Roth, your family can enjoy a tax-free income. By  December of the year after the owner dies and is based on their lifetime, the beneficiary required minimum distribution starts. Decades of tax-free income will be experienced for younger beneficiaries. Additionally, paying taxes now may leave a larger nest egg for the future since you/your client's tax bracket may be lower than the beneficiaries. 

7. Donate

Consider giving out to causes you trust in a portion of your estate. While you are alive and upon your death, your support can always be used by good organizations. To name a charity as a beneficiary of your IRA is one of the simple strategies you can do. Your heirs' federal and state income tax will be saved by this when they withdraw IRAs they inherit. 

8. Have a Trust Protector

Once you die, your trust language is more than likely permanent, well despite the fact that change is the only constant thing in the world. Maintaining the intent of your trust even after you pass on will be made possible by a trust protector. A trust protector are given powers including making amendments to the trust as a result of a change in law, removing and replacing a trustee, resolving disputes between multiple trustees and more.

It is better to consult a professional if you feel hesitant about your future decision. It is always to be prepared for the future. It is now or never. 

Elliot Kravitz, ATP
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