In the arena of estate planning, there are five major areas that we address for most of our clients: avoiding unnecessary court involvement, preserving privacy, maximizing income tax deferral planning (IRAs), planning to ensure availability of government benefits (Medicaid), and structuring affairs to ensure assets stay in the family bloodline (bloodline trusts).

The federal estate tax is usually not a concern, but if the estate tax exemption should be substantially reduced, more estates will be subject to the tax. 

If this happens, people will be wise to update and review their planning.

Retirement accounts are creatures of the law. As such, they are subject to many rules, such as when you must begin taking out distributions and how much you must take (and therefore pay tax on).

When one passes, the beneficiary designation on file with the administrator or custodian controls. The beneficiary has settlement options that they should consider before making any decisions. 

It is advisable to seek professional guidance on your settlement options and which choice is best to take. We usually try to structure these assets so as to preserve income tax deferral as much as the law permits.

Government benefits are a lifeline to those in need. Planning in advance so as to qualify for needs-based programs is critical to success in this arena, and can be the difference between someone who gets care and someone who does not get care.

Making sure your agent can do this kind of planning is also critical. If the person who needs it is disabled, nothing can be done absent express specific authority to the contrary.

Keeping your assets in the family is easy if you plan ahead. The law recognizes “future interests” so you can direct that a child inherits your property for their use. Then, then when they pass it goes to your blood descendants, not your in-laws. Most people want this.

We can make sure the in-law will not get it in a divorce or at death, and we can shelter it from estate taxes in the child’s estate and remove it from exposure to creditors’ claims.    

Good estate plans will address all of the issues raised above. While estate planning is about who gets what, it is also about how they get it and what that means. 

In this day and age, estate plans need to be flexible. They need to guard against exposure to estate taxes and take inflation into account.

They also need to account for the possibility that fortune could turn against them, necessitating the need or want to obtain government benefits. 

Mark F. Winn, J.D., Master of Laws (LL.M.) in estate planning, is a local asset protection, estate and elder law planning attorney. mwinnesq.com