Estate Planning: 2017

Estate Planning
Your Reason in Focus – Q1 2017


The end of life is complicated. Between the emotional aspect of losing a loved one and the responsibilities of properly handling the affairs of the decedent, dealing with death is just hard. The questions below are a small sample of the issues we address when we work with people to plan for this difficult time.

breakDo I need Estate Planning

  • Do I want my final affairs to be handled by someone other than the state of CA?
  • Does someone rely upon me financially?
  • Do I have minor children?
  • Do I own a home?
  • Do I have retirement plans?
  • Are there personal items which I would like to go to specific people or places?
  • Do I have a bank account?
  • Are there any outstanding life insurance policies on my life?
  • Do I have a spendthrift child?
  • Do I have a child on Social Security Disability?
  • Do I have beneficiaries?
  • Do I want to preserve and protect the relationship my beneficiaries have
  • What happens if I cannot make my own healthcare decisions?
  • If I am in an accident, who will the hospital call?


If any of the questions were answered as a “YES” or an “I DON’T KNOW”, then there are estate planning issues to address. Remember, this is not an all-inclusive list. When you sit down and talk about everything involved in the business of being you, the surprise will be how many things pop up.

One final way of thinking about it: If there is someone out there who will be negatively impacted by your death, other than emotionally, you need estate planning.

It is imperative that your estate planning control documents are in order.

As we described in detail in last year’s Estate Planning post, the most critical Estate Planning concern for all of our clients is making sure that our loved ones are protected in the event of death. A first step in meeting this goal is make sure that your Estate Planning control documents are in order.  These documents include, at a minimum, a statutory will, a durable power of attorney and an advanced health care directive. If it is determined that the bare minimum does not fully meet your needs you will need to engage the services of an attorney to assist in the development of a living trust or other legal documents.

We need to move beyond the point where estate planning is only done by the minority.

Fewer than half of American adults (42 percent) have a will, according to a survey published this week on, a website that offers resources for older Americans and their caregivers.[i]

A will is a tool that can be used to dictate how your money and belongings are distributed after you die. It tells the courts, and other powers that be, what you want done with your stuff. It is important to understand that not all assets are effectively transferred by a will. If you jointly own a home or a bank account, for instance, the house, and the funds in the account, will go to the joint holder — even if your will directs otherwise. Similarly, retirement accounts and life insurance policies are distributed to the beneficiaries you designate, so keep them up-to-date.

For a very few, estate planning includes planning for the Estate Tax, more popularly and morbidly known as the Death Tax.

Under current law, for 2017, the estate and gift tax exemption is $5.49 million per individual, up from $5.45 million in 2016. This means an individual can leave $5.49 million to heirs and neither party will pay a Federal estate or gift tax. Surviving spouses can carry over each other’s unused exemptions, allowing a couple to shield $10.98 million from Federal estate and gift taxes. Less than 2 percent of all estates are subject to the estate tax with the current exemption amounts.[ii]

It is important to note that Estate and Gift taxes are separate and distinct from Income taxes. Most people will fall under the limit and have no Estate or Gift tax to pay, but will likely have Income taxes to pay on inherited or gifted Retirement Accounts, Annuities, or other similarly tax-deferred investment vehicles.

Every election and power change in our government brings confusion surrounding estate planning.

With each election there is change. Understanding the issues is important and we always welcome you to call if there is confusion.

As part of a larger tax initiative, President Trump has suggested a complete repeal of the federal estate tax. This would not be a free-for-all in terms of passing assets to beneficiaries as it would likely come with compromises on how the basis of assets is calculated upon inheritance. Should this come to fruition it would be a huge shift. Something similar took place in 2010, when there was no estate tax. [iii]  Yankees fans may recall that George Steinbrenner, the owner of the New York Yankees, died in 2010, allowing for his ownership interest to pass to his heirs without being subject to the estate tax.

If the estate tax goes missing for a little while, keep in mind two things: when power shifts again in Washington it will likely be back, and if it goes away it will be replaced with a different tax, such as a capital gains tax. The need to plan will not stop, it will just twist and turn with the road it is driving.

By our own volition we can take control of the estate planning process if we address the topic early.

The estate planning considerations we should all focus on are very unlikely to have any changes. Those include family planning, disability planning, business succession, probate avoidance, special needs beneficiaries and generally to ensure that they are able to make key decisions (now and later) with regard to their property and their family members.

Our purpose is to enable a lifetime of rational, informed and well-reasoned financial decisions. We are here to assist you in all stages of the estate planning process. We welcome your input and ask that you contact us with any questions or to help you establish your own approach to ensuring that your estate plan is organized, effective and up-to-date.

Your Truly,

[i] Ann Carrns “Why You Should Get Around to Drawing Up a Will.” The New York Times, 8 Feb. 2017,

[ii] Ashlea Ebeling “Will Trump Victory Yield Estate Tax Repeal?” 9 Nov. 2016

[iii] Rebecca Lake “How Trump’s Estate Tax Proposal Might Affect the Wealthy.” 23 Jan. 2017,


All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards.

Investing in securities in emerging markets involves special risks due to specific factors such as increased volatility, currency fluctuations and differences in auditing and other financial standards. Securities in emerging markets are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments.

An index is a statistical measure of change in an economy or a securities market. In the case of financial markets, an index is an imaginary portfolio of securities representing a particular market or a portion of it. Each index has its own calculation methodology and is usually expressed in terms of a change from a base value. Thus, the percentage change is more important than the actual numeric value. An investment cannot be made directly into an index.

Investing in fixed income securities involves credit and interest rate risk. When interest rates rise, bond prices generally fall. Investing in commodities may involve greater volatility and is not suitable for all investors. Investing in a non-diversified fund that concentrates holdings into fewer securities or industries involves greater risk than investing in a more diversified fund. The equity securities of small companies may not be traded as often as equity securities of large companies so they may be difficult or impossible to sell. Neither diversification nor asset allocation assure a profit or protect against a loss in declining markets. Past performance is not an indicator of future results.

Securities offered through 1st Global Capital Corp., Member FINRA and SIPC. Bruce Rawdin-Baron, Steven W. Pollock, Sean P. Storck, Matthew J. Anderson and Nicole Albrecht are Registered Representatives of 1st Global Capital Corp. Investment advisory services, including RSN portfolios offered through Reason Financial. IMS platform accounts offered through 1st Global Advisors, Inc. Reason Financial and 1st Global Capital Corp. are unaffiliated entities. Reason Financial is a Registered Investment Adviser placing business through 1st Global Insurance Services. Registration does not imply a certain level of skill or training. We currently have individuals licensed to offer securities in the states of Arizona, California, Illinois, Indiana, Kansas, Massachusetts, Michigan, New York, Oregon and Washington. This is not an offer to sell securities in any other state or jurisdiction. CA Department of Insurance License: Bruce Rawdin-Baron #0736631, Steven W. Pollock #OE98073, Sean P. Storck #0F25995, Matthew J. Anderson #0F21959 and Nicole Albrecht #0F99962.

Retirement plan withdrawals may be subject to taxation and penalties when withdrawn early.

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