The Estate tax threshold is now more than five million dollars. For ninety nine percent of the population Estate tax is not an issue. Nonetheless, many issues need to be considered when working with clients to formulate a plan for disposition of their estates.
For a husband and wife with their children only (no other children) the couple must consider whether to leave everything to each other, whether to leave particular assets to individual children, whether to treat the children equally, whether to have contingent trusts for underage children, who to name as Executor, and whether the Executor should have the power to sell real estate among other issues.
Couples with children from prior marriages have more concerns. The most frequent question I get is this: “If I leave everything to my spouse, will he/she take care of my children or will my spouse leave everything to his/her children to the exclusion of my children”. This is a difficult scenario and has to be carefully considered.
Ensure Your Voice Is Heard
Another issue frequently encountered: many people have their property disposed of by beneficiary designation that passes to a beneficiary regardless of what the will says. For example, real estate can be owned with right of survivorship, bank accounts can be set up to go to the survivor, life insurance and retirement accounts ordinarily have beneficiary designations. It can be that many of the person’s assets are already disposed of in this method so there is little or nothing to pass by the will.