There are many different ways to do an estate plan, and many of them are “right.” Estate plans can organize how assets are managed and transferred and provide for the next generation. Any estate-tax benefit depends on the assets, planning techniques and applicable law.

But they may not do all those things as efficiently as they could. So how do you correct that? How do you make the little nips and tucks that make your estate plan as efficient and effective as possible?

Five Estate Plan Tips to Review

• Transfer Your Real Estate Into Your Trust. One of the many cool things about having a trust is that you can put real estate located in different states into one trust.  That way you avoid probate in multiple states.
• Review business interests with your tax adviser. A family limited partnership does not create an automatic 35 percent valuation discount for securities or real estate. The tax treatment and any supportable valuation adjustment depend on the facts and applicable law. Source: IRS Form 706 instructions: Schedule F, valuation discounts. Our firm does not provide tax advice; consult your personal tax adviser before transferring assets.
• Review real estate separately. Do not assume that a valuation adjustment appropriate for one asset or ownership interest applies to another.
• Review your gifting plan. Check the federal annual gift tax exclusion for the year of each gift and whether the gift qualifies. Larger gifts may require reporting without necessarily producing tax due. Sources: IRS: Frequently asked questions on gift taxes; IRS: gift tax reporting requirements. Ask your attorney about any proposed trust or divorce-related restrictions rather than assuming a gift can be insulated from every future claim.
• Review life insurance needs. Estate tax and filing obligations may arise at the first spouse’s death. Marital deductions and other planning may defer some tax, but that result is not automatic. Sources: IRS Form 706 instructions: filing requirements and Schedule M; Washington Department of Revenue: estate tax FAQ. Review any survivorship life insurance with your attorney, tax adviser and insurance professional.

 Not all of these steps make sense for everyone. Review the costs, responsibilities and tax consequences with your attorney and personal tax adviser before changing your plan.

Over the past 34 years, the Law Offices of Christopher A. Benson has helped clients with estate planning. Contact our Federal Way office for a free initial consultation to discuss your goals and planning options.