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Estate Planning: Things to Consider

Updated: Apr 5, 2019

Estate planning requires consideration of both tax and non-tax issues. In most cases, non-tax issues are more important. Here some basic issues you should consider when visiting your estate planner.



Consider how you want your spouse, your children and others (e.g. your mother) to share in your estate. Do you want to give everything to your spouse and let her/him deal with how your children inherit? How will you and your spouse eventually share your estate with your children? What if you have children of different marriages? Do you want to restrain gifts to younger or disabled beneficiaries by using trusts to prevent premature gifts? Do you want disproportionate gifts to help younger children, disabled children, or poorer children? Do you want to make charitable gifts and if affordable, would it be preferable tax wise to do so during your life? Do you want to empower a trustee to have the flexibility in dealing with gifts to your under aged children and what criteria do you want to impose on that fiduciary? The answers to these questions may not be readily apparent and many make you anxious. But a seasoned estate planner can help you find workable solutions.


Consider who you want to stand in your shoes during periods of disability and on your death. If you are married, you probably want your spouse to assume those responsibilities, but what if she/he is predeceased or disabled? Consider who you want to succeed separately or as co-fiduciaries, and in what order. Fiduciaries include: personal representatives for your estate, trustees over a living or testamentary trust, agents under a power of attorney, guardians for your care and for the care of your children, conservators (court appoint managers of your property if you are disabled and do not have a living trust), and persons who have powers to make health care decisions. These fiduciaries will be the same for these different positions and will be either individuals, banks, trust companies, or a combination. They must be trusted to handle financial matters. Family relatives are sometimes poor choices, if lacking common sense, or ability to withstand pressures from greedy heirs or charlatans, or ability handle financial responsibilities (investment decisions, tax returns, etc.). Again a seasoned estate planner will help you find workable solutions to your choice of fiduciaries.


Do you want your assets sold and then divided among your heirs or do you want certain assets and heirlooms to go to specific persons? Consider how you want a business to continue on your death. Consider if you want to consolidate in a single estate plan how your assets pass on your death. For example, joint tenancy property with the right of survivorship will only pass to the survivor but rarely provides what happens on the death of both joint tenants. Again a seasoned estate planner can help you with these issues.



Gifts to your spouse and public charities are tax-free. But an estate and gift tax is imposed on your cumulative lifetime and on death gifts to all others. The federal estate and gift tax became permanent in 2013. However, the estate/gift tax exemption has risen to $5,340,000. If you are rich enough, you could give away $5,340,000 to your children and pay no tax. If you are married, your spouse can do the same thing and your rich children could receive as much as $10,680,000 estate/gift tax-free! The 40% estate/gift tax applies to non-charitable, non-spousal gifts in excess of the $5,340,000 exemption.

You can also make annual non-reportable, tax-free gifts up to $14,000 per year per person, as well as qualified gifts for tuition and medical expenses. Since the $5,340,000 exemption is so high, most people will have no tax incentive to make $14,000 annual gifts to their kids.

Tax wise, you still have important gifting choices that affect both income and estate/gift taxes:

  1. If you gift property to your children during your life, your children will “inherit” your low tax basis. If you wait to make the gift on your death, your children will obtain an income tax basis equal to the value of the property on your death.

  2. If you gift property to your spouse and not your kids, your property will most likely increase in value and that will increase the tax basis your children will receive, when your spouse dies.

  3. Even if you and your spouse have a combined estate under $5,340,000, your estate will likely grow during your surviving spouse’s life. If exceeding the exemption on here death, the surviving spouse’s estate will be taxed. This risk can be minimized by filing an estate tax return on your death, allowing your spouse to “inherit” your unused exemption (called portability) and double-up on exemptions, totaling $10,680,000 instead of $5,340,000, when she/he dies.

  4. If you and your spouse have assets nearing $10,000,000, it may be a good strategy to freeze the value of the first $5,340,000 of your estate, to avoid unwanted appreciation in your spouse’s estate that could pass the exemption on her death.

  5. Prudent estate planning is a process, which involves careful interaction between you and a qualified estate planner. Based on your desires and concerns, your estate planner should be able to offer you choices that help you formulate a workable and cost effective estate plan.

Written by Thomas C. Morrison.

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