In the past, estate tax was often the tail that wagged the estate planning dog. In today’s world, the estate tax exemption has grown exponentially, and affects a relatively small number of people. In Arizona, we do not have an Arizona estate tax, so for the vast majority of our clients, the only estate tax we are concerned with is the Federal Estate Tax. The Federal estate tax exemption is now $11.2 million per person, allowing a married couple to pass up to $22.4 million free of Federal estate tax. Along with this high exemption, we were given “portability” in 2013.  Portability is essentially the ability of a surviving spouse to claim a deceased spouse’s unused estate tax exemption amount in addition to the survivor’s own exemption amount. Can you say “double-coupon days at the IRS checkout counter?” These factors have changed the game in estate planning.

In our Firm, we have always preferred to allow a client’s personal planning goals to lead the way. We know there are many tools in the estate planning toolbox that we can use to address taxes, but in order to choose the right tool for the job, we must know what is truly important to the client.

The following questions point to frequently overlooked personal planning goals:

  1. What will happen if I become incapacitated? Will I stay at home or go to a nursing home? Who will decide if I am incapacitated?
  2. Who will make decisions for me if I become incapacitated? Will their decisions be respected by banks and other institutions?
  3. Will I (or my parents) lose the house if I (they) go into a nursing home?
  4. How can I protect my business and other assets from litigation and creditor’s claims?
  5. Can I transfer my business to my kids, but still keep the control I want?
  6. How can I (or a loved one) achieve the sort of property rights with a life partner that the law gives to married persons?
  7. Can I give my property to the people I love in a way that is safe from creditors? Can I protect my kids from lawsuits?
  8. How do I keep my kids from fighting over my estate after I’m gone?
  9. Will my children just blow their inheritance?
  10. Can my retirement plan take care of my loved ones after I’m gone?
  11. Can I afford to give to charities I really care about without depriving my children of their inheritance?
  12. What should I do about my child with a drug (alcohol, gambling) problem after I’m gone?
  13. Can I protect my kids from losing their inheritance as the result of a bad marriage?
  14. If my spouse remarries after I die, can I make sure that my property goes to the kids, and not the new spouse?
  15. Can my plan be changed after I die in case one of my kids “hits the lottery,” or “hits the skids?”
  16. How can I look out for my special needs child after I’m gone?
  17. How can I assure that my pets are taken care if I die or become incapacitated?
  18. Can I do anything to pass my values on to my kids after I am gone?
  19. Will I be just a name to my grandchildren, or can I leave a legacy?

These are just a few of the concerns our clients have addressed in their estate plans. Do any of these goals and concerns resonate with you? Are there other things that concern you?