The Swier Law Firm Estate Planning and Probate Law FAQs

 

The most sweeping tax reform in 30 years was just passed by the House and Senate and signed into law by President Trump. What does the new law mean for estate planning?

 

New Opportunities Of Course!

 

The doubling of the estate, gift, and GST tax exemptions to $10 million per person ($20 million per couple) opens a significant, once-in-a-lifetime opportunity for you to protect more assets than ever. Combined with the IRS’s withdrawal of the anti-discounting section 2704 regulations earlier in 2017, tax reform opens the door for dynasty trusts, family partnerships, discounted gifts, and other strategies that could shield entire fortunes for your beneficiaries.

 

Although the estate tax and GST tax exemption doubles on January 1, 2018, to $10 million per person, this increased exemption expires on December 31, 2025. You may be tempted to wait, given that seven years may feel like forever. However, remember that this tax legislation is likely to be heavily modified if the political pendulum swings in the other direction. (The clock is already ticking steadily towards the 2018 midterms and 2020 Presidential election). Of course, our law firm has tools that can build flexibility into your plan, including trust protectors, decanting powers, and other strategies to deal with future changes. But those future strategies only work to preserve options if we implement plans while the exemption is available.

 

If you have any concerns or questions about how the estate tax will impact your family, please feel free to contact us so we can maximize the opportunities afforded by the new bill. 

 

With the mounting cost of funerals and memorial services, it’s become more common for people to include instructions for post-death events with their final arrangements documents and wills. These documents give you a way to state your final wishes for how you want to be remembered when you pass. While this addition to your final arrangement documents is not necessary, it can help your family know specifically what your wishes are beyond the basics of your estate planning in South Dakota.

In a final arrangement document or will in South Dakota, you can leave a portion of your South Dakota estate to help pay for your funeral. This will allow you to specify what you want after you pass. Some of the common questions people answer in this portion of their will are:

• Where you want to be buried?
• Whom you want to officiate at the service?
• What pictures you want to have displayed?
• What type of ceremony do you want to have?
• What are your preferences for location, décor, or music at the ceremony?

There are a number of items that you can specify to make your funeral truly be a celebration of your life. At the same time, giving clear and specific instructions will also help reduce any controversy among your family members, or disputes on how you would have wanted your funeral and who will pay for your funeral.

As you sit down with your South Dakota estate planning attorney, let him know that you want to add this section into your will. This way, you can be sure that your wishes will be met and that you are doing your part to help your family avoid disputes so that they can grieve together.

 

Yes. If you have children, you are not required to leave them any portion of your estate. A common misunderstanding is that you must leave each child at least one dollar. Today, your Will may simply state, “I have intentionally failed to provide for my son, James.”

 

 

No. In South Dakota, married persons may not completely disinherit their surviving spouse, unless the spouse agrees. While it is true that you may dispose of your property in almost any way you wish through your Will, there are some restrictions. Depending on how your Will provides for your surviving spouse, the surviving spouse may choose to take an “elective share” in lieu of the provision made in the Will. The amount of this “elective share” is determined by the length of the marriage. 

 

Yes. Your Will is in effect until it is changed or revoked. You may do this as often as you wish as long as you are legally competent to do so. In fact, it is recommended that you review your Will every two to four years. You should also review your Will if you have a change in tax laws, family circumstances, or in the amount and kind of property you own. Of course, any change to your Will requires a careful analysis to make sure that it reflects your wishes.

 

In South Dakota, a person can challenge your Will by attempting to prove in court that:

• you were under duress or undue influence when making your Will;
• you were incompetent or unable to understand the results of your Will when writing it; or
• your Will does not meet the requirements that make it valid under South Dakota law.

If you die without a Will, it means you have died “intestate.” When this happens, South Dakota's intestacy laws will determine how your property is distributed upon your death. This may include any bank accounts, securities, real estate, and other assets you own at the time of death.

 

No. In South Dakota, married persons may not completely disinherit their surviving spouse, unless the spouse agrees. While it is true that you may dispose of your property in almost any way you wish through your Will, there are some restrictions. Depending on how your Will provides for your surviving spouse, the surviving spouse may choose to take an “elective share” in lieu of the provision made in the Will.  The amount of this “elective share” is determined by the length of the marriage. 

A person who dies and has a Will is said to have died testate. When a person dies without a Will, the court appoints a personal representative to administer the estate and to distribute the property, as provided by law. 

When there is no Will, there will be an intestate probate proceeding. These proceedings are generally in the county where the deceased lived at the time of death. If there is no Will, the persons entitled to share in the distribution of an estate are determined by the rules of intestate succession.

Simply put, basis is the cost to purchase an asset. For example, if you purchase farm land, your basis is the purchase price, plus costs and transfer fees.

This is important because when you sell this asset, tax liability is calculated based on the increase from the basis to the sale price.