Spring 2016 1

Why 2016 May be the Best Time to Review Your Estate Plan

by A. Scott White, CFP®, ChFC, CLU

EstatePlanIn more than 25 years of helping families pursue their wealth goals, I’ve observed that most people do not meet with a professional at regular intervals to review their estate plan and make sure it still meets their family’s needs, much less tweak it for changes in the law. Often when I ask, “When was the last time you reviewed your estate plan with a professional?” the most common response is, “Just did it not too long ago.” Upon reviewing the documents, I find “not too long ago” means 10 or more years ago.

For those of you who have reviewed your estate plans “not too long ago,” 2016 may be the best opportunity since 2009 for a review. With the global stock markets off to a weak start in January, it might be a good time to consider gifting strategies. The annual exclusion gifts (the amount you can give someone without filing a gift tax return) are now $14,000 per individual, up from $12,000 in 2008, and with low stock prices, you can gift more shares of securities than in recent years. Also, with low valuations of securities, this might be a great time to set up a grantor retained annuity trust (GRAT) and/or a spousal lifetime access trust (SLAT), which attempt to freeze securities at today’s prices and allow for future appreciation of security prices out of the estate and gift tax arena for the benefit of your heirs.

Other changes occurring since 2009 make this a good time to review your estate plan. In December 2015, the Protecting Americans from Tax Hikes Act (PATH) made permanent many of the tax extenders which needed to be approved every year by our Congress and President. One of the most popular provisions is the qualified charitable distribution rule (QCD) that allows individuals over age 70½ to give up to $100,000 per year directly to a public charity from their IRA, with some limitations. Since charitable giving plays an important role in estate planning and this law is now permanent, it may be time to review your entire estate plan.

In 2015 a Supreme Court ruling gave same sex couples access to the same estate planning techniques heterosexual married couples have enjoyed for years. This will now make millions of Americans eligible for dramatically different legal rights upon the death or disability of a life partner than previously possible.

In 2011 the unified credit was raised to $5 million and is now $5.45 million (or $10.9 million per couple) in 2016. The unified credit represents the amount you can leave beneficiaries before estate or gift taxes are levied. Estate planning laws that year also established portability, reducing the need for many families to utilize the AB trust—also known as the family marital credit shelter trust—which may allow for less complexity in many estate plans.

If your estate is over $5.45 million (or $10.9 million per couple), the increase in the generation skipping exemption might be worth considering. In 2009 the limitation was $3.5 million (or $7 million for a married couple) that could be placed into a trust for multiple generations before the tax would apply.

In 2011 changes to the Florida durable power of attorney statutes allow individuals to grant more powers to your agent than were previously available.

Estate plans should be reviewed periodically, and given the recent changes to the laws and the opportunities created by weak global stock markets, you might find 2016 to be a great year to review your estate plan. Remember, estate planning, as a component of comprehensive financial planning, should be discussed with your tax and legal advisors for its appropriateness given each family’s unique circumstances. Please contact my office if you want to discuss your family’s estate plan.


The information contained in this report does not purport to be a complete description of the securities markets or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing materials are accurate and complete. Any opinions are those of Scott White Advisors and not necessarily those of RJFS or Raymond James. Expressions of opinion are as of this date subject to change without notice. Past performance may not be indicative of future results. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Strategies discussed may not be suitable for all investors. Investing involves risk and investors may incur a profit or loss regardless of strategy selected. Diversification does not ensure a profit or guarantee against a loss.

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