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2601 4th Street SW
Mason City, IA 50401

Tel. (641)423-1600

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Home Blog Estate Planning in 2021

Estate Planning in 2021

 
Estate Planning in 2021

Last year, we kicked off January by providing education centered around the important topic of estate planning. As we begin 2021 and transition to a new administration in Washington, it is yet again a good time to remind our valued clients of the importance of estate planning.

A couple things to consider in 2021: 

  1. Get organized. Often, families are left gathering statements and searching out information in the wake of an unexpected loss. A new year is a great time to gather your information in one spot. For some people this is a paper Inventory. Other customers prefer to create a digital Inventory. We can also use a robust planning tool, called eMoney, to help clients visualize all their Financial Inventory in one place. 
     
  2. Confirm account ownership and beneficiary designations. It is critical to understand the difference between probate and non-probate assets. It is great to have a will (and we strongly encourage you to have one) but a will holds no power over assets that are jointly owned with rights of survivorship or assets, like life insurance, IRA’s, 401k’s, etc. that name designated beneficiaries. Thus, be sure to make sure you understand what type of asset you have and what happens to it at your death. 
     
  3. Establish (or update) your will. If you die without a will, the laws of your state of residence determine the fate of your minor children and probate assets. If you want to make the decisions, you need a written will to make your wishes known.  A will allows you to: 

    • Name a guardian to care for your minor children (if any) until they reach adulthood, and

    • Name an executor, who will pay the estate's taxes and any other bills and then distribute remainder to your intended beneficiaries. We would be happy to discuss with you the role of the Executor in greater detail as we are experienced in serving this role. 
     
  4. Create (or update) a Trust. For those with significant assets or specific situations, either a Revocable or Irrevocable Trust may make sense. Our team of Trust Officers is available to discuss with you the pros and cons of establishing various types of trusts. We serve regularly as Trustee and can provide good perspective into what may or may not work. We often meet with clients and work closely with their attorney and CPA to ensure the plan makes sense both on paper and in practice. 
     
  5. Don’t try DIY! Although we are all “Google Experts” these days, we strongly recommend against “Googling” your planning documents. Too often mistakes are made that create avoidable issues. It is best to have an experienced attorney prepare the legal documents for you. The cost of unwinding a poorly written estate plan, both financially and often emotionally for your loved ones, should not be underestimated.
     
  6. Pay attention to changes in legislation. We expect law makers to focus on pandemic relief this year but do not be surprised by the potential for legislation increasing estate and gift tax rates. The Biden administration has repeatedly suggested that wealthy Americans are not paying their "fair share" of taxes. The Tax Cuts and Jobs Act (TCJA) made significant changes to the federal estate and gift tax regime. In 2020, the unified federal estate and gift tax exemption was $11.58 million, or effectively $23.16 million for married couples. In 2021, the exemption increased to $11.7 million, or effectively $23.4 million for married couples. In 2026, the exemption is set to fall to about $6 million, or $12 million for married couples, after inflation adjustments — unless Congress changes the law sooner.

We believe solid planning requires special expertise and a team approach. Our team includes individuals with financial planning, investment management, tax and legal expertise, dedicated to working with you and your team of experts, including attorneys and accountants, to deliver and implement a customized plan centered around the YOU. Call us at 641-422-1600 or email wealth@myfcb.bank for a complimentary estate plan review. 

Products provided by First Citizens Wealth Management are not insured by the FDIC, are not deposits of the bank and are not guaranteed by this institution; and, are subject to investment risks, including possible loss of the principal invested. Please note that neither First Citizens Bank nor the First Citizens Wealth Management Department provide tax or legal advice. You should always consult an attorney with a tax professional to determine how to prepare the best estate plan for your situation.

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