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James A. Jones, Attorney At Law
Plan Today, Peace of Mind Tomorrow

Why a nontraditional estate planning approach may be right

As laws change, traditional estate planning advice might not always be appropriate for some Washington residents. For example, they might want to consider whether family members would benefit from an inherited Roth, which may pay out distributions for years.

Changes in the estate tax exemption may require changes in the estate plan. The exemption has increased to $11.4 million, and this could mean that an estate plan that was designed to avoid estate tax may no longer be necessary. However, people should be aware that in 2025, the exemption will revert back to $5.5 million. Congress could make it even lower. Furthermore, there could be income tax on retirement accounts, and this should be accounted for as part of overall estate planning. One option is to make a charity a beneficiary since it would not be required to pay the tax. Some people who purchased life insurance specifically to cover estate tax have been surrendering it, but experts say they should consider a life settlement transaction instead since this can be a valuable asset.

People who are creating a trust should make sure that they fund it. They might also want to consider adding a trust protector, who has a number of additional powers over trustees. Finally, people should account for their digital accounts and assets as well and leave passwords.

While not everyone can talk to family members about the estate plan, it can be helpful to do so if it is possible. This can help ensure that the family understands a person's intentions and may reduce the likelihood of challenges. At minimum, people should know whether they have roles in the estate plan, such as executor or trustee. They should also know where they can find estate planning documents and contact information for professionals associated with it.

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