Passing assets to the next generation: Heirs vs. Uncle Sam

By Anne Eickstadt

ANNE EICKSTADT PHOTO Belvidere Republican
Theresa Harezlak and Allison Alexander of Savant Capital Management presented Heirs vs. Uncle Sam.

Editor

Theresa Harezlak and Allison Alexander of Savant Capital Management came to the Keene Center on Aging to make a presentation about estate planning for a Women’s Business Breakfast Network meeting.

The event on Tuesday, Jan. 15 held a full room of people wanting to learn how to secure their assets to their heirs when they passed on. The ladies informed us that our finances all need to be coordinated or it doesn’t work. A number of their points during the presentation are discussed in Blogs on the Savant website:

Here are a few of the things one should have in mind:

In many families people have just assumed for years that certain things will be part of future plans, but is that true? Do those things still make sense? Do the children truly understand why one of them may get more of one thing and less of another? Are the family members fully aware that one person will be responsible for specific tasks and decisions while others will not be expected to participate? These are just a few examples of the things that should be discussed before it’s too late. Some other relevant questions to consider:

Who will inherit what and, just as important, why?

Is there a certain child who will assist when the time comes? Which tasks and how?

What are the assets, where are they held, and how are they titled?

Where are the relevant estate planning documents located?

Where is the log-in information to view accounts online?

Do all the assets generate statements?

Are there old life insurance policies that are paid up? Who do you contact to receive those (possibly tax-free) proceeds? Are those life insurance policies in the name of your ex or your current relationship?

What are the tax implications of inheriting specific assets, and what work is required to transition and/or maintain the assets?

What professionals do mom and dad work with (CPA, attorney, insurance, etc.)?

What resources will be used to care for one or both parents should additional expenses arise?

In 1987, the federal estate tax exemption was only $600,000. In 2002, that exemption was increased to $1 million. It continued rising until it reached $3.5 million in 2009, and then the estate tax was repealed for one year in 2010. It returned in 2011, but the exemption was raised to $5 million. All along, these amounts were increasing with inflation indexing.

Then, in 2018, the exemption was doubled to $11.2 million.

Thus, currently, a married couple can pass more than $22 million to their heirs with zero estate tax.

So what?

Well, in addition to those massive increases…

For complete article, pick up the Jan. 31 Belvidere Republican.