Transferring the $11.58 million exemption to a dynasty trust can also help avoid the GSTT, he added.
Plans should generally be reviewed every three to five years, said Gary Chan, CPA/J.D., director of tax and estate planning at EP Wealth Advisors. One current trend involves provisions that allow a trustee or another designated person to change provisions to accommodate future changes. “There’s also a trend to provide for lifetime trusts rather than making distributions of trust assets at certain ages,” Chan said.
Some HNW clients fail to realize they can distribute wealth gradually, making annual exclusion gifts of $15,000 per person. “Also, direct payments for tuition and medical expenses don’t come into play for the $15,000 annual limit,” McGrory said.
“What often gets ignored is the life event of other individuals within their plan,” noted Steven Wittenberg, director of legacy planning in SEI’s private wealth management group in Oaks, Pa. “Clients forget the details of their plan over time and on review realize that family or friends they selected are no longer in their lives.”
“We often hear, ‘I didn’t realize he was still listed as a trustee’ or ‘The children are now old enough to be trustees,’” Siller said. Divorces and unforeseen personality faults in young adults can also throw off plans.
A bullet-point summary is helpful, Wittenberg said, “accompanied by a flow chart linked to net worth. Assets should be titled and the flow chart should explain clearly where assets go. This should be updated with any major shift in law [or] asset level.”
The exemption is slated to revert to pre-reform levels in 2026.