Yes, you still need an estate plan

Yes, you still need an estate plan


That’s a big number. When last year’s Tax Cuts and Jobs Act was in the works, there was a lot of hoopla surrounding the potential elimination of the estate tax. While it didn’t happen, the basic individual exclusion was doubled to more than $11 million (over $22 million for a couple), making estate tax an issue for very few families. In fact, the Tax Policy Center estimated that only 5,000 of the approximately 2.7 million people who died in 2017 paid estate tax – and that was under the old, more stringent, rules.

All that might have you thinking, “Honey, we can cancel our appointment with the estate planning attorney.” Before you pick up the phone, here are six good reasons to keep that meeting on your calendar.

You want to decide who will make decisions for you. A lot of estate planning is focused on what happens to your stuff – personal property, investments, real estate, etc. – when you’re gone. However, it’s also important to put a decision-making framework in place. In other words, you need a power of attorney to name your agent (and perhaps a backup or two) if you’re unable to manage your finances. You can discuss how and when it’s done with your attorney.

You get to call the shots on your health care. Same concept, different area. While you’re at it, you can lay out your wishes for what should happen – or not happen – if you’re terminally ill. Quiz your attorney on any nuances that pertain to your state. 

You can minimize the effects of probate (the process of administering your estate). Over the years, I’ve worked with a lot of folks interested in avoiding the time, money and public nature of the probate process. Whether that leads you to establish a revocable living trust, strategically utilize beneficiary designations and deeds, or start a robust gifting program, it’s a great topic to discuss with your attorney no matter the size of your estate. 

You’ll make it easier on your loved ones. Avoiding unnecessary taxes isn’t the only benefit of a good plan. By spending a little time (and, perhaps, money) now, you’ll help your family avoid added expenses later.  

You’re concerned that things could get complicated. Maybe you’re worried about one of your kids or grandkids blowing through their inheritance. Or this could be your second marriage and if something happens to you, you want to take care of your new spouse while also providing for your kids from your first marriage. These are all situations that can be taken care of through an appropriately crafted estate plan.

You want to promote peace instead of conflict. In my experience, when a family member passes, it’s a ripe time for pent-up frustrations to boil over into a full-blown family feud. Do your best to mitigate this by leaving clear guidance regarding your wishes and desires.

Sure, $11.2 million may be a big number, but it’s not big enough to keep you from getting your affairs in order.

J.J. Montanaro is a certified financial planner with USAA, The American Legion’s preferred provider of financial services. Submit questions for him online.