If you already have an estate plan, we recommend that you review your documents periodically to ensure that they continue to meet your goals and comply with changes in the law, and whenever a significant life event occurs (e.g., birth of a child, death of a spouse, divorce, serious illness or purchase of a new home).  

 

It is also important to periodically review your estate planning documents to make sure that they still make sense in light of recent gifting you may have done and given your current life circumstances and level of assets.  For instance, your estate planning documents may assume that you will have a high applicable exclusion amount remaining to be used at the time of your death.  If you made large lifetime gifts, that assumption is likely no longer true.

 

You should consider whether property held in an irrevocable trust should be distributed prior to death so that it may obtain a step-up in basis upon the death of the beneficiary to whom it was distributed.  Whether such a distribution is advisable depends on a careful analysis of the beneficiary's assets and applicable exclusion amounts, as well as the possibility that the stepped-up basis is eliminated as proposed in the President's budget proposal.

 

You should continue to be cautious in relying on portability for your estate planning, as it is unclear that the portability provisions under existing laws will remain in place.  In addition, a deceased spouse's unused exemption amount will not be available upon remarriage of the surviving spouse.

 

You also should review any provisions in your will and trust agreements that distribute assets according to tax formulas and/or your applicable exclusion amounts to ensure that the provisions, when taking into account the higher current applicable exclusion amounts, continue accurately to reflect your desires.

 

Your allocation of your generation-skipping transfer (GST) tax applicable exclusion amount should be reviewed to ensure that it is utilized most effectively if you wish to plan for grandchildren or more remote descendants.

 

Now that same-sex marriages must be recognized by every state, as well as the federal government, same-sex couples should review and revise their estate planning documents and beneficiary designations to ensure that the amount and structure of any bequests to the spouse are appropriate.  Same-sex couples should also consider the benefits of gift splitting for gift tax purposes and amending previously filed federal estate, gift and income tax returns and state income tax returns.