End of Year Review

Year End

It is that time of year again; time to reflect on where you have been and where you are about to go. It is also a prime opportunity to review your estate plan and determine whether it still meets your individual needs. Have there been any material changes in your circumstances? New babies? New marriage? New divorce? If the answer is yes, you need to review your estate plan.

We at JGB believe that a healthy estate plan is one that changes in response to time and circumstances. However, in order to ensure the health of your documents, those documents must periodically be reviewed.

Reviewing Your Estate Plan

When you are reviewing your estate plan, you should evaluate the plan as a whole. Do your Trustees still make sense? Are your Trustees still willing and able to perform the roles you selected them for? You should ask the same questions about the other folks named in your documents. Furthermore, you should think about the ages of the individuals you have named. Did you name an older brother, an older sister, or a parent? Are your Trustees the same age as you? If so, it might be a good idea to work an adult child or a professional fiduciary into your documents.

This time of year is also a prime opportunity to ensure your trust is properly funded. Consult your JGB Asset Transfer Checklist and Funding Instructions. Have you acquired new assets? Are they titled in accordance with your trust documents? If not, your estate plan will not work the way you want it to.

Gift and Estate Taxes

Finally, another year brings another increase in the unified estate and gift tax exemption. In 2020, the unified exemption will rise from $11.4 million to $11.58 million for individuals and to $23.16 million for couples. The size of the exemption, coupled with the IRS decision to forgo clawbacks, create a unique opportunity for our higher net worth clients to lock in these exemptions prior to their expiration in 2025. No changes were made to the $15,000 annual gift tax exclusion. Consider calling your JGB attorney to make an appointment to discuss your options.

Legal Update

In a unanimous opinion in the case of North Carolina Department of Revenue v. The Kimberly Rice Kaestner 1992 Family Trust, the Supreme Court held the mere presence of a beneficiary in the state does not allow that state to tax trust income where the beneficiary has not received, and cannot demand, a distribution of that income. This particular case involved a trust operating under New York law, created by a Grantor who was a resident of New York and whose assets were held in Massachusetts. North Carolina attempted to tax the trust’s income relying on state law that enables the taxing of any income that is for the benefit of a resident of North Carolina. The Supreme Court roundly rejected this application as a violation of the Due Process Clause, holding that for a state to tax such income, the state must have at least a minimum connection with the property that is the subject of the tax and the beneficiary must “control, possess, or enjoy” the property at issue.

TrustGuard™ 2020

TrustGuard™ enrollment for 2020 is now open. TrustGuard™ is our proprietary, process-driven program, designed for our clients who are serious about protecting their investment in their Trust-based Estate Plan with an annual review. A subscription to TrustGuard™ includes an annual review of your estate plan and funding for the enrollment year, along with any required changes to your plan. Enrollment invitations were sent out to all our currently enrolled TrustGuard™ clients, as well as our clients who executed their documents in 2019.

Enrollment for the 2020 TrustGuard™ period ends on February 28, 2020. JGB clients who choose not to re-enroll during the enrollment period will not have another opportunity to become members of TrustGuard™.

Participation in TrustGuard™ is entirely voluntary. The TrustGuard™ enrollment subscription is billed at an annual flat rate. Clients who pay their enrollment in full prior to February 1, 2020 receive a $100 discount off the price of full enrollment. Contact our office if you are interested in subscribing to the TrustGuard™ program.


JGB will launch a new newsletter specifically designed to meet the needs of our valued TrustGuard™ clients. This new newsletter will be published quarterly with a focus on keeping our TrustGuard™ clients up-to-date on all the newest developments in the world of taxes and estate planning, as well as providing practical advice on how to keep your estate plan in top condition. Look for this new TrustGuard™ exclusive newsletter in February 2020.

About the Author:

Mike Hendricks is an associate with Johnson, Gasink & Baxter, LLP, where his practice focuses on estate planning, probate, business law, asset protection, and administration of trusts and wills. Mike understands that each client is unique and each situation distinct. Together, with the team at Johnson, Gasink & Baxter, LLP, he works to protect his clients and to safeguard their loved ones and their interests.

Outside of work, Mike and his wife Meg spend the vast majority of their time chasing after an energetic and highly mobile toddler. Mike currently serves on the Board of Directors for the West Point Society of Williamsburg.

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