Nothing Quite Makes Me Sit up and Listen Closely like an Estate Planning Attorney living with Stage 4 Cancer
Gary Altman recently gave a good talk on how to help when someone is diagnosed with a terminal condition.
He's not only been doing this for a long time, but in 2013, he was given three years to live from incurable cancer.
Now, pondering his own mortality six and half years later, he's still kicking and dishing out advice to others who are in this tough situation. He thinks about how best to try to triage the situation best for the sick person and their family.
Verify everything with your specific attorney, do not rely on these incomplete notes.
Get with your estate planning attorney to map out all the documents you and your family may need. This includes advanced medical directive, HIPAA release, power of attorney, wills/trusts, and preneed guardianship.
Double-check beneficiary designatiuons property titles in writing
Right now the Federal Estate Tax isn’t a problem for most families, as a couple needs to have more than $22,800,000 to have it apply. But that is set to sunset in 2025 to a much lower number, and nobody knows what it will finally end up being. So putting together a strategy including possible asset transfers may still be worth considering. Also, Minnesota’s estate tax is currently $2,700,000, going up to $3,000,000 in 2020.
I didn’t know or had forgotten about the five states that have an inheritance tax. Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. They range from 1% to 18%.
- 56% of all Americans are without a will
- 39% of individuals do not have a will
- 49% of families with stepchildren do not have a will
- 59% of families who have been cut off from their child for at least a year have no will
- 62% of those divorced did not have a will
Last-minute gifting is very tricky. Get help to make sure it’s done properly, or it can be a big problem.
Your original purchase price for investments may be “stepped up” when you die and leave them to family, eliminating the tax burden. There are strategies around this that can be very helpful.
Don’t die with carry forward investment losses if you can help it, consider a Roth conversion, realizing gains, etc.
Be careful putting minors down as beneficiaries; they would then likely need a court-appointed guardian.
How to change a beneficiary or owner:
-no cross outs or whiteout
-overnight the document with tracking, or fax with call or email to confirm receipt
-must be received and recorded prior to death
-cannot normally be changed by power of attorney who is going to be beneficiary
Possibly gift low-cost basis after-tax investments to dying spouse to get a step up. Needs to own for 1 year.
Common pitfalls of late-stage planning:
-does the family get along?
-Will they agree on a course of action?
-Children from previous marriages
-Change of residence for tax purposes, whether intentional or not
-Where they die, make sure the death certificate reflects what state they lived in, not where they died
Make sure late-stage planning is in harmony with the contents of the person's estate planning documents. If they do not match, the post-death administration could be a nightmare.
Verify everything with your specific attorney, do not rely on these incomplete notes.
Thanks for taking a look,
Tom
This article represents opinions of the authors and not those of their firm and are subject to change from time to time, and do not constitute a recommendation to purchase and sale any security nor to engage in any particular investment or legal strategy. The information contained here has been obtained from sources believed to be reliable but cannot be guaranteed for accuracy.