The bottom line that clearly emerges in a recent estate planning article centering on taxes is that tax considerations are not something to be narrowly or separately considered by any planner.
Put another way: Tax repercussions and consequences can cut — and usually do — across all dimensions of an estate plan. That is, their implications are broad, and that means that thinking about taxes should never be done in a vacuum-like fashion or without due regard to how tax matters might affect every aspect of estate administration.
And that simply makes sense, given that many estate plans include a will, various powers of attorney, one or more specialized trusts, multiple insurance and savings vehicles and additional components. Tax-related matters would very rarely touch upon only one or a minority of those estate planning prongs; rather, tax considerations most often flow across the entirety of a plan, touching all its cornerstones and needing to be dealt with in an integrated manner.
The above-cited article notes the existence of end-of-life clauses scheduled to kick in on various saving/checking and brokerage accounts. As noted, such accounts contain so-called “payable on death” or “transfer on death” provisions that result in money passing to designated heirs. Concerns might reasonably arise regarding the tax implications of transfers, especially if they are of a certain threshold amount.
Another thing to consider regarding such clauses is that they operate independently of what might be provided for in a will or other estate document.
Such considerations, notes the article, make it advisable for planners to consult with their estate administration attorney concerning “how these forms impact your other estate planning intentions.”
A central point to note for any planner is that sound estate planning is an integrative process that can encompass many things, including tax matters. A proven estate administration attorney can provide further information and proven assistance in fashioning a plan that is well tailored in a given case.