• The exclusion amount of $5 million continues in effect but is inflation-adjusted; for 2012 the exclusion amount was $5.12 million and for 2013 it increases to $5.25 million.  If ATRA had not passed, the estate tax exclusion amount for 2013 would have dropped to $1 million, with no inflation adjustment.
• Portability has been enacted as a permanent feature of federal estate tax law.  Portability allows a surviving spouse to utilize the unused portion of the first spouse to die’s gift and estate tax exclusion amount.
• Portability is an election that requires filing a Form 706 estate tax return, even if the estate and gifts of the first spouse are less than the exclusion amount.   As a result, the surviving spouse must weigh the expense and complexity of filing the estate tax return against the likelihood that the second spouse to die will need the unused portion of the first spouse’s gift and estate tax exclusion amount.
• Portability is not indexed for inflation after the year of death.
• The estate tax return must be filed within 9 months after date of death so the portability election is time-sensitive.  It is possible to request a 6 month extension.
• For 2013 and future years, the top tax rate for federal estate, gift and generation-skipping transfer tax increases to 40 percent.   Absent ATRA, the estate tax rate for 2013 would have jumped to 55 percent with no portability feature.
• Some couples think that portability will fully address their estate tax planning concerns.  However, portability does not offer any creditor protection, and the surviving spouse might select beneficiaries that the first spouse did not intend after the death of the first spouse.  Traditional estate planning tools such as credit shelter trusts continue to offer safeguards that are desirable to some clients.
• State estate tax and inheritance tax laws vary widely and must be considered in estate planning.  As states seek additional revenues, expect creativity on this front.  A limited number  of states currently give domestic partners tax parity with surviving spouses.
• The annual gift tax exclusion amount has been $13,000; for 2013 it increases to $14,000 per donee ($28,000 if gift-splitting).

While the rules and the tools change from year to year, the fundamental importance of estate planning has not changed.  Work with a qualified estate planning attorney to clarify your estate planning objectives and implement a plan appropriate to your family and assets.  Hindson & Melton LLC serves clients in Georgia and South Carolina, including Atlanta, Dunwoody, Sandy Springs, Roswell, Charleston, and surrounding communities.

© Karen S. Hindson, Hindson & Melton LLC, March 23, 2013

• Have there been signficant changes in your assets or your family situation since you signed your Last Will and Testament?
• Are the persons you named as Executor, Guardian for your children, or Trustee still alive and good choices to serve in these roles?
• If you named Co-Executors, do they get along well or is there likely to be conflict?
• Does your Will reference a personal property memorandum and if so, have you prepared one?  Where is it?
• Where do you keep your original Will, who knows where it is, and do you have confidence that it would be found and honored if you die?
• Do the terms of your Will coordinate well with your “non probate” assets – such as jointly titled properties, TOD  (transfer on death) or POD (pay on death) accounts or assets, life insurance policies, annuities, IRAs, and 401(k) accounts?
• Do you understand what would happen to each asset in the event of your death?  Have you confirmed that your understanding is correct?
• Do you have step-children and have your wishes regarding them been clearly spelled out in your Will?
• If you are named in your parents’ planning documents, are their documents current?
• If you own a business or part of a business, what happens in the event of your death?  Is this determined by your Will or are there business documents that govern?
• Do you own assets that your heirs or Executor would not know how to handle, such as a valuable collection of personal property items?
• How old are your estate planning documents, and were they prepared by a qualified professional?

Estate Planning Checkup - Powers of Attorney

• Do you have either a health care power of attorney or an advance directive for health care?  Are the health care agents you named still alive and good choices?
• Does your health care agent have a copy of your health care POA or advance directive?
• Do you have a durable financial power of attorney?  Does your financial power of attorney become effective only if you are incapcitated?  Is the agent still alive and a good choice?  Should you name an alternate agent?
• Do you have an old power of attorney that needs to be revoked?
• Do your parents have powers of attorney that are appropriate in light of their health, assets, and family issues?

Estate Planning Checkup – Trusts

• If you have a trust, do you understand the purpose of the trust?
• Has your trust been funded or have properties been transferred to the trust as you intended?
• Do you know what is owned by your trust?
• Are there changes that need to be made in the Trustee or other trust terms?

Estate Planning Checkup - Beneficiary designations

• When is the last time you checked your employer’s records, life insurance, and retirement investment accounts to see who your named beneficiaries are?
• Are your beneficiary designations coordinated with your Last Will and Testament and other planning documents?
• Do you have copies of the beneficiary designations or printouts in a notebook?

Estate Planning Checkup – Accounts and passwords

• Do you have online accounts for which you do not receive paper statements?
• Do  have a complete and current list of accounts, log-ins, and passwords in case of your death or incapacity?  Where is this list and who knows about it?
• Are there business accounts that someone would need to access in the event of your death or incapacity?

Estate Planning Checkup - Insurance

• If you have disability, long term care, or life insurance, do you have a copy of each policy, and does your family know where they are?  Do they understand what would be required to be eligible for benefits?
• Do you have insurance appropriate to your family situation, needs and goals?  Do you understand the policies you have?

In Conclusion

This checkup is not a complete list of questions; it is intended to stimulate your thoughts about your situation and your personal estate plan.  Every individual has specific concerns based on his or her life choices, family relationships, and assets.    Contact the attorneys of  Hindson & Melton LLC or another qualified estate planning firm to create, review, or update your estate plan.  Hindson & Melton LLC serves Metropolitan Atlanta, Dunwoody, Sandy Springs, and Alpharetta Georgia, as well as Charleston, South Carolina.

© Karen S. Hindson, Hindson & Melton LLC, February 28, 2013

Charleston Office - Historic Franke Building

DIRECTIONS TO: 171 Church Street, Suite 160, The Franke Building, Charleston, SC  29401 — LOCATED IN DOWNTOWN CHARLESTON, ON CHURCH STREET IN THE FRANKE BUILDING, ACROSS THE STREET FROM TOMMY CONDON’S RESTAURANT, BETWEEN CUMBERLAND STREET AND MARKET STREET, HALF A BLOCK FROM THE MARKET.

From the North Area:  Take I-26 to Charleston.  Take the Meeting Street exit (#221-B).  Take a right onto Meeting Street from the exit ramp.  Go approximately 20 blocks.  Staying on Meeting Street, you will cross Calhoun Street.  After you cross Calhoun, go approximately 4 blocks.  You will then cross Market Street.  Go one block further to Cumberland Street.  Take your left onto Cumberland Street, go half a block.  You will see the entrance to the parking garage on your left, in the middle of the block.  There are yellow poles with ENTRANCE written in red, where you should turn into the garage.  There should also be a sign there that reads “All jurors must park here”.

From West Ashley: Via Highway 61:  Proceed on Highway 61, at the Hwy 17/30 split, take ramp 30 via the James Island connector spur.  Stay in the left lane to Downtown Charleston (sign says Calhoun St. 30).  Continue in the right hand lane over the connector bridge, and take the South Lockwood Boulevard exit.  Proceed down Lockwood Boulevard to the end at the Coast Guard Station until it curves off to the left and becomes Broad Street.  Continue down Broad Street, 8-10 blocks to the corner of Broad and Meeting Streets.  Take a left onto Meeting Street.  Stay in the right hand lane and go 3 blocks to Cumberland Street.  Turn right onto Cumberland Street.  Go half a block and on your left, in the middle of the block, will be the entrance to the Cumberland Street parking garage.

Via Highway 17 South, West Ashley:  Heading North on Highway 17, across the Ashley River Bridge, go forward into the far right hand lane to Lockwood Boulevard South.  Continue to stay to the right and proceed down Lockwood until it curves off to the left at the Coast Guard Station and becomes Broad Street.  Continue down Broad Street, 8-10 blocks to the corner of Broad and Meeting Street.  Take a left onto Meeting Street.  Stay in the right hand lane and go 3 blocks to Cumberland Street.  Turn right onto Cumberland Street.  Go half a block and on your left, in the middle of the block, will be the entrance to the Cumberland Street Parking Garage.

From Highway 17 North, Mt. Pleasant:  Proceed down Highway 17, over the Ravenel Bridge.  You may either take the Meeting Street exit or the Morrison Drive/East Bay exit.  If you take the East Bay/Morrison Drive exit, take a left off the ramp, proceed down East Bay about 8 blocks, and you will cross Calhoun Street.  Go approximately 8 more blocks, cross South Market Street and go one block further to Cumberland Street.  Take a right onto Cumberland Street.  Go two blocks to Church Street.  Cross Church Street and go half a block.  The entrance to the parking garage will be on the right, in the middle of the block.

Parking: When you park your car in the garage, go back to the first level.  On the opposite side of the garage from where you made your entrance, there is a flight of stairs.  Underneath the stairs is an open doorway with no door.  There is a red pipe over that doorway.  There is also a sign that says “Franke Building, no trespassing”.  Ignore the sign and go through the open doorway onto the red brick walkway with the navy blue awning.  After you go through two glass doors, take your left at the fountain and we are the next suite on the left (Suite 160).

These seminars are in partnership with Defense Management Group, Defense Network Alliance, Economic Futures Group, South Carolina Manufacturers Alliance, Spartanburg Chamber of Commerce, Update SC Alliance, and the Charleston Regional Development Alliance.

For more information contact Karen Hindson or your area Dixon Hughes Goodman office.