If you don’t keep tabs on your family, unscrupulous people often will.

Widow with dementia gave $600,000 to Kabbalah Centre charity – latimes.com.

In a sense, this is what happens all the time.  Strategies fall into and out of vogue, while for some families, the disfavored techniques may work the best.  One thing I often notice is the recital of typical estate planning techniques (like the QPRT) along with news about what is happening with the legislative calendar.  The two things are often not really related to each other.

Now we have a $5,000,000.00 (indexed for inflation) “applicable exclusion amount” for two years for the federal gift tax, when we had a much smaller amount, $1,000,000.00.

This massive exemption from the the gift tax means that techniques we may have used previously to get the estate to not “burn” too much gift tax exemption are far less relavant to many.

Now we are left with the prospect of an exemption amount that will go unused forever if not used now.  In many cases, clients should be encouraged to “burn” their exemption now and get assets outside their estate.

Morrison & Foerster LLP: Gift Tax Planning Opportunities – The Window Is Closing.

§ 13100.  Collection or transfer of personal property without probate

Excluding the property described in Section 13050, if the gross value of the decedent’s real and personal property in this state does not exceed one hundred fifty thousand dollars ($150,000) and if 40 days have elapsed since the death of the decedent, the successor of the decedent may, without procuring letters of administration or awaiting probate of the will, do any of the following with respect to one or more particular items of property:

(a) Collect any particular item of property that is money due the decedent.

(b) Receive any particular item of property that is tangible personal property of the decedent.

(c) Have any particular item of property that is evidence of a debt, obligation, interest, right, security, or chose in action belonging to the decedent transferred, whether or not secured by a lien on real property.

Essentially, this means the “successor” can start to act.  There is a process involving an affidavit.  Its also a mistake to assume this would be a free for all.  Its really just a way to allow the efficient transfer of a small amount of assets.

Of course, this is primarily for information gathering for an executor for example.  An unused account is deactivated after nine months.  You can’t bequeath your amazing email address as it turnes out.

These articles are often tax-heavy, which is the case here.  Its also worth looking at family harmony in general.  Thats harder for many advisors to gauge, since it does not become evident after death.  With taxes, despite the uncertainty, you can usually see it coming.

Our practice focuses on Estate and Trust Litigation as well as Estate Planning for families ranging from wage earners to high net-worth business owners with complex family structures. The website has only recently been re-launched.  You can learn more about our practice here.