ESTATE PLANNING ALARMS CHECKLIST

By Lorin Castleman, Attorney

Certified Specialist, Taxation Law
California State Bar Board of Legal Specialization
THE CASTLEMAN LAW FIRM
A Professional Corporation

5870 Stoneridge Mall Rd., Suite 207
Pleasanton, CA 94588
(925) 463-2221
fax: (925) 463-0328

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The purpose of this checklist is to highlight some situations that are "red flags" indicating a need for (a) the creation of an estate plan, or (b) the review of an existing plan, or (c) the modification of an existing plan. This is a basic checklist, and is not complete by any means. There are many circumstances not listed which require careful consideration. This checklist can be used by advisors when reviewing their clients' situations or by individuals.

ANY SIZE ESTATE

Personal Issues
No goals
Wealthy descendants
Planning for your own estate without considering the tax effect on your children and grandchildren
Your parents have planned for their own estate without considering the affect on your estate or on the grandchildren
A potential inheritance must be considered
Chronic illness or life-threatening medical condition
Problem family members
Existing or potential medical, mental, or emotional problems of family members
Divorce
In-law or step-child concerns
Second + marriage; children of different parents
"Sensitive trustees" (Beneficiary also trustee)
Recent death but no consultation with attorney
Document Issues
No will
Joint tenancy
Trust mill trust
Unfunded trust
Inflexible trusts
Trust without disclaimer provisions
Truat without special IRA Trust provisions
Trust without GST provisions
"Five and five" power in bypass trust
Estate not reviewed within last 5 years
Change in family but no change in plan
Change in wealth but no change in plan
Trust for child, remainder to grandchild
No generation skipping planning
No Advance Health Care Directive (formerly known as a durable power of attorney for health care)
No (or old) Durable Power of Attorney for Asset Management
Trust and Durable Power for Asset Management not coordinated to permit gifts from trust or amendments to trust
Installment note - cancellation or transfer by will or trust
Financial Issues
Life insurance that will create an estate tax problem if not held in an irrevocable life insurance trust ("ILIT")
Revocable living trust should probably be the primary beneficiary of all life insurance provided that it will not create an estate tax problem
Beneficiaries of IRAs, 401(k) and 403(b) plans, and Qualified Retirement Plans are not named, or are improperly named, or the choices have not been coordinated with the rest of the estate plan.
Planning to sell highly appreciated asset without considering use of a Charitable Remainder Trust ("CRT") to sell the asset in order to eliminate capital gains tax
Withdrawal right notices not given or not properly given
Gifts to grandchildren
Payments for education or health not made directly to provider
Funding 1st to die life insurance trust from community property
Gifts with retained interests
Proposed sale of assets from C Corp
Potential IRD issues
One spouse wealthier than other
Non citizen spouse and no QDOT
Participant in IRA or QRP approaching age 701/2
Proposed disposition of installment note
No plan for long term care
No IRA Trust planning

SINGLE AND ESTATE MORE THAN $3,500,000

All of the Above Issues Plus:

No gifting considerations
No valuation discount considerations for larger estates

MARRIED AND ESTATE BETWEEN $3,500,000 AND $7,000,000

All of the Same Issues as Above, Plus:

Simple will or trust

MARRIED AND ESTATE MORE THAN $7,000,000

All of the Same Issues as Above, Plus:

Simple will or trust
No gifting considerations
Estate is planned for maximum tax deferral
No generation skipping planning
No creditor-predator protection planning
No valuation discount considerations for larger estates

Copyright © 1998 through 2009 by Lorin Castleman. All rights reserved

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