Estate Planning

Estate Planning 101

February 9, 2021

The year 2020 saw us postponing our plans for travel, seeing family, and doing many of the things we’re used to doing without a second thought. Yet the uncertainty of the past year has highlighted one type of planning we shouldn’t postpone: developing a solid estate plan. Passage of the Setting Every Community Up for Retirement Enhancement (SECURE) Act and the Coronavirus Aid, Relief, and Economic Security (CARES) Act, along with a variety of recent events contributing to further uncertainty in markets and the economy as a whole, indicates that now is not the time to postpone estate planning any further. Your trusted advisors at Geffen Mesher can help you formulate or update your estate and gift plans so you can feel more secure in these uncertain times.

The 2021 federal estate tax exemption is currently set at $11.7 million per person, and if your net worth isn’t close to that level, you may think you don’t need to do much in terms of estate planning. However, the exemption level is set to revert to $5 million after 2025 (adjusted for inflation going forward from there), and President Biden’s tax plan includes provisions to lower the exemption even further. If you live or own property in Oregon or Washington, both states have their own estate tax, with much lower exemption levels ($1 million in Oregon, $2.193 million in Washington). Even moderately wealthy individuals can benefit from tax-conscious estate planning.

There are numerous tools available for estate planning beyond writing a will. One of the most basic estate planning tools is the revocable living trust (RLT). While similar to a will, an RLT offers greater privacy, along with time and cost savings, by allowing assets to pass directly to heirs, avoiding the probate process associated with wills. These trusts can also offer significant estate tax and gift tax savings by controlling how, when, and to whom your assets pass when you die. Other trusts, such as spousal lifetime access trusts (SLATs), allow you to take advantage of the current higher estate exemption amounts.

As you look back and prepare to file your 2020 taxes this spring, we encourage you to consider your future estate plans and reach out to your CPA or a member of our Estate & Trust team. We can work with you, your attorney, and your financial planner to develop effective estate plans that not only save taxes but, more importantly, provide for your family and loved ones according to your express wishes.



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