Estate planning often encompasses more than just foreseeable processes and situations during one’s lifetime. A growing reality, that many might not be cognizant of, is that your executor, trustee, and beneficiaries can implement actions after your death to realize the most productive outcome from your testamentary plan. This approach involves the construction of the estate plan to bestow the power to make well-informed decisions after your demise.
To further explain this phenomenon, consider a scenario where the decedent has bequeathed specific assets to a trust with the partner or children as beneficiaries. The executor has the option to fund the trust with the specific assets or use assets from another source. The decision may influence the tax outcome. Such post-mortem decisions can be extremely beneficial in situations where state estate taxes vary.
Many estate plans are being intentionally designed today to give your beneficiaries and executor/trustee the decision-making power to make informed post-mortem planning decisions upon your death. This approach, albeit slightly unconventional, can assist in achieving the best results possible for your testamentary plan.
This strategy addresses both the need for testamentary flexibility and the reality of an ever-changing financial landscape, making it feasible for post-mortem corrective actions based on the effective laws at the time of one’s death. With varying state property and estate laws, post-mortem planning can be a critical tool for utilizing the estate plan to its maximum benefit.
The full story, originally published in Stroll Lloyd Harbor in October 2023 by Rivkin Radler LLP, can be read here.
This revelation serves as an important reminder for legal professionals and advisors to prepare for potential future changes in law and create provisions for modifications accordingly. Such skilled anticipation is crucial in ensuring that clients’ estate plans are not only robust but also flexible enough to accommodate changing circumstances.
The encapsulating reality is that careful estate planning has the potential to extend beyond the client’s time on earth, empowering his or her beneficiaries to react to changes in circumstances and law, and ultimately ensure the best use of the bequeathed estate.