In his Kiplinger article "Six Estate Planning Tips for Those Approaching Death," John Goralka outlines six actions an individual should take to ensure peace of mind for themselves and their family facing impending death or serious illness.
- Having an attorney in fact that you can trust while you are still competent will decrease financial problems in the case you become incapacitated.
- An individual should set up a revocable trust in order to avoid probate after death.
- Consider swapping out depreciated assets for appreciated assets with a low-income basis in order to gain an income tax advantage.
- Making charitable gifts while one is still alive can translate into substantial income tax savings if the individual's estate is not subject to estate tax.
- Goralka recommends ensuring life insurance policies are paid, and don't have a lapse in coverage.
- "You may be able to avoid Income in Respect of Decendent (IRD) items, which include wages, individual retirement account distributions and other income that may be paid after death." said Goralka. "While a deduction is available for income tax purposes, estate tax paid does not provide dollar for dollar protection. Note also that the estate tax deduction for the calculation of the income liability is often overlooked.