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It’s Estate Planning Awareness Month. Is Your Plan Up-To-Date?

10/06/2023

October is Estate Planning Awareness Month. This annual reminder offers the opportunity to review your estate planning and ensure it is up-to-date and accomplishes your goals.

Funding your Revocable Trust

Your estate planning is prepared. You signed it. Mission accomplished? Almost….

There is a very important step, called “trust funding” that often gets missed after executing a trust. If you started funding your revocable trust and did not finish, BREATHE, it is ok. You are still able to finish!  Now is the time to pick up your Estate Planning Binder and follow those instructions until all of your assets are transferred to your trust. Please contact us if you need assistance.

Annual Checklist

Does your estate plan need to be updated? Use this checklist to identify changes that may affect your plan:

Family: Have your family circumstances changed? Children grown? Divorce? Inheritance? Aging parents you would like to provide for?

Fiduciaries: Are your Executors, Trustees and Agents under your Powers of Attorney still the individuals you would choose to handle your affairs if incapacitated, or administer your estate after you die?

Assets: Have you purchased any asset that needs to be transferred to your trust? Do you have a highly appreciated asset with a low-cost basis that you would like to sell?

Business: Do you need to transition your business to the next generation? Are you looking to gift, sell or transfer any assets?

Charity: Do you have any charitable gifts you would like to make? Have you become a volunteer or board member of a not-for-profit and would like to incorporate the organization into your plan?

Gifts: In 2023, are you making gifts of cash or other assets to any one person or entity with a total value given of more than $17,000? If so, you may need to file a gift tax return. This gift tax return is due on the same date as your Form 1040 individual income tax return, April 15, 2024.

Lifetime Giving: In the past 5 years, there have been major changes in federal and state law concerning trusts and estates. Time is running out to take advantage of the increased lifetime giving exemption provided by the Tax Cut and Jobs Act in 2018, which is set to “sunset” on January 1, 2026, back to the original amount adjusted for inflation.

You can download a copy of the checklist here.

Legal Updates You Should Be Aware Of

Secure Act 2.0

Recently, the IRS issued Notice 2023-54, bringing a sigh of relief to beneficiaries of inherited Individual Retirement Accounts (IRAs) subject to the 10-year rule. The Notice states that such beneficiaries are not required to take a Required Minimum Distribution (“RMD”) in the year 2023.

Understanding the 10-Year Rule for Inherited IRAs:

Inherited IRAs are retirement accounts passed to beneficiaries after the account holder’s passing. Before the Secure Act, which applied to individuals who have died after January 1, 2020, beneficiaries had the option to “stretch” the withdrawals from the inherited IRA over their lifetime, taking smaller RMDs each year. This approach allowed beneficiaries to maximize tax-deferred growth and minimize the immediate tax burden.

However, the SECURE Act changed the rules for inherited IRAs. Now, for most non-spouse beneficiaries, including grandchildren and other non-designated beneficiaries, the 10-year rule applies. This required beneficiaries to withdraw the entire balance of the inherited IRA within ten years of the original account owner’s death.

Important Considerations:

While the suspension of RMDs in 2023 brings welcomed flexibility, beneficiaries must remember that RMDs may resume in the subsequent years for those who inherit from those who passed away after they were already taking RMDs prior to their death. Thus, it is still essential to plan diligently and consult a financial or tax advisor to make informed decisions about your inherited IRAs.

Corporate Transparency Act (the “CTA”)

On January 1, 2024, many companies with less than 21 employees will be subject to the Corporate Transparency Act of 2020. This act requires you as a reporter to identify to FinCEN (Financial Crimes Enforcement Network) the ultimate beneficial owners of the enterprise, along with detailed identifying information for each individual. For example, the trust beneficiaries are identified if the trust is a member of a limited liability company.


HMB’s Trusts and Estate Group is here to guide you. Please reach out to one of our partners to discuss updates or discover new planning initiatives.

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