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View From the Trenches

By:  Kristina Bolhouse, CPA/PFS, CFP®

Like the impact of a new drug or medical treatment, we are now seeing firsthand the benefits of good estate planning as well as the implications of the new estate tax law changes that went into effect in 2013. Here are some specifics we have recently observed:

  1. Access – Good estate planning ensures the people who need access to key financial information, have it available. It is not enough to name a financially responsible person as executor or power of attorney. Among other things, your executor needs to know what (and where) the assets are, account numbers, phone numbers, user name, passwords and key contacts. For example, if you store your estate documents in a safe deposit box, make sure your executor has access.
  2. Control – We could write a book on the control issues we see with regard to trustees and executors. However, one that is easily missed is the implications of the unintended loss of control in order to avoid estate taxes. In large estates, there are legal devices to take advantage of the $5 million per person (now $5,430,000 with indexing) exemption amount. These devices tend to come with a price: loss of control of the ultimate disposition of the assets and/or restrictions during the surviving spouse’s lifetime.  It is important to not be overly ambitious with tax planning, without a clear understanding of the extent to which the surviving spouse loses some control over his/her remaining lifetime.  By “control” I am not only referring to the assets themselves, but also the ability to name the future beneficiaries of those assets. 
  3. Clear Wishes – If a “wish” is to become a reality, it must be put into writing and planned for. For example, if your wish is for your grand-daughter to have your family heirloom, it must be put in writing AND then put the ring in a safe place – like a safe deposit box. I’m always amazed at how many items disappear between the time of death and the time the executor arrives to secure the assets.  

Wishes don’t just apply to the disposition of the estate assets.  End of life decisions should also be made when everyone is of sound mind.  If you truly do not want to have life support (i.e. feeding tubes or other procedures), make sure your spouse or the person with healthcare powers is clear on this.  Your legal documents (such as a living will) should reflect your intent – even the rationale behind it.  Even burial wishes such as whether or not cremation is an option should be clear to your survivors.

While all of this sounds pretty depressing, there is a positive aspect to estate planning:  There is no better way to honor a loved one (family OR friends) than to include them in your estate planning.  Even token gifts that may be a small part of your estate may be very meaningful to a recipient.  This is the best part of estate planning.  By planning well, it can be like a kiss from your spirit to someone who made your life on earth a bit more joyful. 


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