Estate Tax Planning

No one likes talking about death, but here is something we must do, put together an “In case of Death Folder.” This isn’t inviting bad luck, it’s being responsible and kind to the people you love. ✅1. Key personal information Can be one page. • Full legal name • Date of birth • Address • ID numbers • Next of kin details When people are grieving, even basic things become hard to find. ✅2. Bank accounts and cash information List: • Bank names • Account numbers • Type of account • How funds can be accessed If there’s cash kept anywhere at home, state it plainly. ✅3. Investments and assets Include: • Investment apps and the asset inside, Stocks, mutual funds, treasury bills • Property documents • Business interests • Cooperative schemes Add contact persons if possible. Someone should know who to call. ✅4. Insurance and benefits Most benefits go unclaimed simply because no one knows they exist. List: • Life insurance policies • Employer benefits • Pension details • Any group cover Write down how claims work, even roughly. ✅5. Debts and obligations • Loans • Guarantees • Ongoing financial commitments Both what you owe and what’s owed to you. ✅6. Digital life Include: • Email accounts • Cloud storage • Social media preferences • Subscriptions You can state what should be deleted, transferred, or left alone. ✅7. Dependents and responsibilities Spell it out. • Children or dependents • School information • Care instructions • Trusted guardians or advisers Do not assume “they’ll figure it out.” ✅8. Legal documents If they exist, list them. • Will • Trust documents • Power of attorney And clearly state where the originals are kept. ✅9. A personal note This sounds small, but it matters. Write a short letter. Who to call first. What you want done immediately. Anything you feel strongly about. It helps your family breathe before the hard logistics begin. ✅10. Where this folder is kept This sounds obvious, but it’s often missed. Tell at least one trusted person: • Where the folder is • How to access it Planning for death is just planning for the people who survive us. You don’t need to finish it in one day. Start with one page. One list. That alone is already an act of love. You can update the folder periodically. SHARE for others to learn.

Would you like for a court to control your finances if you cannot? How might you want a legacy, financial or otherwise, used and remembered? What happens in the event you are ill or incapacitated, even temporarily? If you have one, do you feel children or other heirs would use a legacy - large or small - wisely? Austin Jarvis, JD MBA, estate planning specialists on my Schwab Center for Financial Research (SCFR) team, recently published a SCFR Wealth Management Insight, "5 Foundational Estate Planning Documents." https://lnkd.in/e8m36F4J All adults, no matter their age, health, wealth, or family situation can increase their choice, clarity, and control of their finances with foundational estate planning documents. The first four documents are legal in nature: 1️⃣ Durable power of attorney 2️⃣ Advance directives 3️⃣ Will 4️⃣ Often, a revocable living trust, combined with a Pour-Over Will The last, though, is not legal. It's directive, and emotional: 5️⃣ "Love you letter' to your family Call it what you want. A "letter of instruction," if you aren't the "softer" type! Either way, this document is an opportunity to share information about the things in your life that may not be obvious to anyone but you. What financial and other values are most important to you? What messages would you like to be passed on to family? What might you not say in a will, even (yes) a simple message of positivity and purpose. Estate planning for some may feel unpleasant. Consider the alternative: lack having your voice heard or limited or unclear control over how all you worked for is used. All financial and wealth management plans ideally include these foundational documents, in a package, that go beyond law to also express, what's important to you? For more, see the memo. #estateplanning #wealthmanagement

Legacy planning isn’t just for billionaires and CEOs it’s for anyone who wants control. Here’s the hard truth: “Someday” is a lie. Life doesn’t wait, and neither should you. Here’s how to stay ahead: 1. Burn the Generic Will → Basic wills = basic mistakes → Tailor it to your real priorities → Avoid disasters your family will hate you for 2. Trust the Power of Trusts → Ditch the probate nightmare → Cut the IRS out of the inheritance party → Keep your wishes private and ironclad 3. Handle Guardianship Like a Pro → Your kids deserve better than courtroom roulette → Pick people who share your values → Guarantee their future is secure 4. Keep the Peace with Business Succession → No fights, no chaos, no egos → Clear leadership plans that last → Your business survives and thrives without you 5. Outsmart Uncle Sam with Tax-Savvy Gifting → Give now, save later → Lower taxes, bigger impact → Put your family first, not the government What would happen to everything you’ve built if “someday” never came?

One of the most challenging skills in decision-making is facing uncomfortable truths head-on. Despite tech advances, aging—and the shift from doing to being, and ultimately, not being (yes, death)—is currently inevitable. This shared journey often includes a reduction in or loss of cognitive function. Making critical decisions when your "necktop computer" (brain) is compromised is tough. That’s why some savvy folks are preparing things like gun trusts, specifying what happens to their firearms if and when cognitive decline sets in. This is just one example, but it's a smart move to plan for this statistically-likely future, even if it's a difficult reality to face. So, what can you decide now for better decisions later? Think of this as designing an elegant "last chapter" for your life. No need to fear it—it might or might not be long, but it can be lovely! Here are five ways to start this process: 1. Create an Advance Healthcare Directive: Outline your healthcare wishes and appoint someone to make decisions if you can’t. This ensures your preferences are respected and reduces the burden on loved ones. 2. Set Up a Durable Power of Attorney: Appoint a trusted person to handle your financial and legal matters if you become incapacitated. This provides financial security and ensures your affairs are managed properly. 3. Create or Update Your Will: Specify how you want your stuff distributed after your death, including naming an executor and guardians for minor children. This clarifies your wishes and prevents potential conflicts. 4. Establish a Trust (e.g., Gun Trust, Living Trust): Set up trusts to ensure smooth transitions and management of your stuff. Trusts can help avoid probate, simplify distribution, and offer tax benefits. 5. Organize Important Documents and Information: Gather essential documents like birth certificates, marriage licenses, insurance policies, bank details, and key contacts. Store these in a safe, accessible place and inform a trusted person about their location. I finally made it through the first 4, and I'm working on #5. What decisions will you make today to create an elegant last chapter for your future self? #decisionmaking

I just met with a 35-year old doc who’s income is going to jump from $79,000 per year as a fellow to to $100,000 per MONTH as an attending. Here’s what I told him to do: 1. Get a quote for a $3-5 million umbrella policy to protect his plan from potential personal lawsuits from at-fault accidents in his car or home. 2. Apply for supplemental true own occupation long-term disability insurance to protect his surgical sub-specialty as a pediatric hand surgeon (likely going to need to supplement with Petersen International above $30k per month). 3. Work with an estate planning attorney to draft wills, living wills, powers of attorney, and Revocable living trust documents. 4. Apply for $20 million of 20-year level term insurance to protect his family if he were to pass away unexpectedly (he has two young kids). 5. Build an emergency fund worth 3-6 months of his current living expenses (essentially half a month of his new pay). 6. IRS maximum into him and his wife’s Roth 403(b)s $23.5k each for 2025. 7. Take Advantage of additional after-tax contributions to each of their 403(b)s and elect in-plan conversion via Mega Backdoor Roth. Another $46,500 each in 2025. 8. Automate additional $100k of savings into a joint taxable brokerage account to build liquidity and save for future home purchase in 1-3 years. 9. Continue with PSLF for the remaining 22 months of payments he’s got left till his Federal student loans are forgiven (he’s on the old PAYE plan; IDR payments capped at 10-year fixed repayment). Lots more to do. We’re just getting started. But there’s enough here to keep us busy for the next several months.

You know the importance of drafting a Will. (but you bury your head instead.) Your family thinks you have it under control. Yet you haven't looked at your beneficiaries in years. It's okay! I understand. It's not exciting. But it's your duty. Your obligation to your family. It's simply the right thing to do. 👉 Here's a step-by-step breakdown to get started. STEP 1 - List All Assets ✅ Identify everything you own. ✅ This includes real estate, investments, and personal items. ✅ For example, a house, stocks, and a cherished piece of jewelry. -- STEP 2 - Choose Beneficiaries ✅ Decide who gets what. ✅ This can be family, friends, or charities. ✅ A unique example: leaving your coin collection to a nephew passionate about history. -- STEP 3 - Consider Tax Impacts ✅ Understand how choices affect taxes. ✅ Consult with a financial advisor for best practices. ✅ For instance, gifting a portion to charity for a tax deduction. -- STEP 4 - Update Regularly ✅ Life changes, so should your plan. ✅ Births, deaths, and divorces are all triggers for updates. ✅ A real-life scenario: revising your will or trust after the arrival of a grandchild. -- STEP 5 - Communicate Your Wishes ✅ Share your plans with your family. ✅ This prevents surprises and disputes. ✅ Sharing your decision to donate a portion to an important cause can inspire others. -- Contrary to common belief, everyone needs estate planning. Whether you're: ➡️ working or retired ➡️ single or married ➡️ wealth or not Careful estate planning can benefit you. P.S. What's your next step in estate planning? P.S.S. If you need help, I'll be here when you're ready. ___________ 👉 I post here regularly here. Do you want to hear from me more often? Follow me Patrick Shope, CWS® if you want more no-nonsense retirement planning tips, strategies, and ideas.

High-net-worth taxpayers have various year-end opportunities to minimize tax liabilities. Key strategies include using the estate and gift tax exemptions, taking advantage of trusts, and making strategic gifts during periods of market downturns. Here are some specific (non-charitable giving) ideas to consider: Estate and Gift Tax Exemption: The exemption is $13.61M for 2024, increasing for inflation to $13.99M in 2025. Consider using the increased exemption before it reduces to approximately $7 million after Dec. 31, 2025. While the election results may impact these features, nothing is set in stone yet. Maximizing Exemptions: High-net-worth married taxpayers should max out their exemptions before the end of 2025. Married couples not maxing out both exemptions should use one spouse’s exemption over $7 million. Unmarried taxpayers should seek personalized tax advice. Annual Gift Exclusion: In 2024, the exclusion is $18,000 per person per year, or $36,000 for married couples. Use this exclusion before year-end. The exclusion for 2025 is $19,000 per person. Early Gifting: Make 2025 gifts in January to shift appreciation outside of your estate. Using Trusts: Consider trusts for significant gifts to benefit from asset protection, estate tax benefits, and protection in case of divorce. Non-Cash Assets: Gift non-cash assets during market downturns for potential tax advantages. Spousal Lifetime Access Trusts (SLATs): Use SLATs for lifetime gifts while retaining indirect access to the funds through a spouse. High-Interest Rate Strategies: Use strategies like charitable remainder trusts and qualified personal residence trusts when interest rates are high. (December's 7520 Rate is 5.0%) Discounted Assets: Gift assets subject to discounts for lack of marketability and control. Business owners should consider stacking income tax exclusions for qualified small business stock. cc: Ted Smith, CAIA Daniel Magier, CFP®, CAIA®

The Friday 5-Minute Estate Planning Audit for Business Owners (Save This Checklist) Every Friday, I run through this checklist. Takes less time than your last coffee run. Could save your family six months of frozen accounts and legal nightmares. (𝘈𝘯𝘥 𝘣𝘦𝘧𝘰𝘳𝘦 𝘺𝘰𝘶 𝘴𝘢𝘺 "𝘐'𝘮 𝘵𝘰𝘰 𝘣𝘶𝘴𝘺" – 𝘐 𝘣𝘦𝘵 𝘺𝘰𝘶 𝘴𝘱𝘦𝘯𝘵 𝘢𝘵 𝘭𝘦𝘢𝘴𝘵 20 𝘮𝘪𝘯𝘶𝘵𝘦𝘴 𝘵𝘰𝘥𝘢𝘺 𝘰𝘯 𝘓𝘪𝘯𝘬𝘦𝘥𝘐𝘯. 𝘠𝘰𝘶'𝘷𝘦 𝘨𝘰𝘵 5 𝘮𝘪𝘯𝘶𝘵𝘦𝘴 𝘧𝘰𝘳 𝘵𝘩𝘪𝘴.) 𝗠𝗶𝗻𝘂𝘁𝗲 𝟭: 𝗕𝗮𝗻𝗸𝗶𝗻𝗴 𝗥𝗲𝘀𝗼𝗹𝘂𝘁𝗶𝗼𝗻 𝗖𝗵𝗲𝗰𝗸 • Who can sign on your business accounts right now? • That partner who left last year? Still authorized • Your ex-spouse? Might still have access • Quick scan: All signatories still alive, employed, and trusted? 𝗠𝗶𝗻𝘂𝘁𝗲 𝟮: 𝗕𝗲𝗻𝗲𝗳𝗶𝗰𝗶𝗮𝗿𝘆 𝗥𝗲𝗮𝗹𝗶𝘁𝘆 𝗖𝗵𝗲𝗰𝗸 • 401(k) - Not defaulted to "estate" • Business life insurance - Someone knows it exists • Bank accounts - TOD/POD designations current • That old IRA from three jobs ago - Yeah, check that too 𝗠𝗶𝗻𝘂𝘁𝗲 𝟯: 𝗗𝗶𝗴𝗶𝘁𝗮𝗹 𝗔𝘀𝘀𝗲𝘁 𝗦𝗰𝗮𝗻 • Password manager has emergency access set up • Crypto wallets documented (not the passwords, the existence) • Business social media accounts - Someone can access them • That domain portfolio worth $50K - It's in the estate docs, right? 𝗠𝗶𝗻𝘂𝘁𝗲 𝟰: 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗦𝘂𝗰𝗰𝗲𝘀𝘀𝗶𝗼𝗻 𝗦𝗮𝗻𝗶𝘁𝘆 • Buy-sell agreement exists and funded • Key person insurance is active • Operating agreement updated this decade • Someone knows how to run payroll if you can't 𝗠𝗶𝗻𝘂𝘁𝗲 𝟱: 𝗧𝗵𝗲 𝗕𝗮𝗻𝗸 𝗥𝗲𝗮𝗱𝗶𝗻𝗲𝘀𝘀 𝗧𝗲𝘀𝘁 • Death certificates - Family knows to order 15+ • Bank-specific forms - Downloaded and stored • Estate EIN process - Someone knows how • That one account at the credit union - It's documented Red flags found? Fix ONE thing before Monday. Just one. Because I've watched families spend months trying to access accounts while the business hemorrhages cash. Employees quit. Clients leave. Value evaporates. All because nobody spent 5 minutes on a Friday. Your perfect will means nothing if the bank won't accept it. Your sophisticated trust structure? Worthless if accounts are frozen. Your business succession plan? Academic if nobody can access the operating account Monday morning. 𝗧𝗵𝗲 𝗧𝗵𝗿𝗲𝗲 𝗠𝗼𝘀𝘁 𝗖𝗿𝗶𝘁𝗶𝗰𝗮𝗹 𝗙𝗶𝘅𝗲𝘀: -> Update banking resolutions TODAY Remove ghosts. Add current players. Document it. -> Create your "Break Glass" document Every account. Every password manager. Every critical contact. Sealed envelope. Trusted person. -> Set calendar reminder: First Friday monthly Run this audit. Takes 5 minutes. Saves everything. The most expensive estate planning mistake isn't the document you didn't create. It's the 5-minute check you didn't do. Because your family doesn't need a perfect estate plan. They need access. They need continuity. They need those accounts unfrozen. Set your Friday reminder now. Your business (and family) will thank you when it matters.