Post-mortem planning refers to the available decisions and elections that an executor of an estate has when implementing an estate plan after a person’s death. The name “post-mortem” planning can be a bit deceptive as most of the planning is done before an individual’s death through the estate planning process.

What Is Post-Mortem Planning?

During the estate planning process, an individual can provide an executor with options about what decisions and elections can be made after their death to achieve the most beneficial result. Due to the ever-changing legal and tax laws, as well as changing personal situations, having built-in flexibility for an executor to make decisions in the present instead of trying to predict the future can be an effective strategy to maximize estate assets and transfer them in the most beneficial way.

Post-Mortem Decisions and Elections

Executors have numerous decisions to make for a decedent when administering their estate. Typically post-mortem planning involves making decisions affecting tax elections or how to best transfer property to enhance the estate as much as possible. The attorneys at North Carolina Estate Planning & Fiduciary Law provide our clients with comprehensive legal advice on issues surrounding trust administration, probate, and post-mortem planning issues, such as:

• Guidance on issues related to federal estate tax, fiduciary income taxes, and other tax liabilities

• Guidance on judicial and non-judicial modifications of irrevocable trusts and decanting to new trusts

• Assistance in securing appraisals for investments, real estate, boats, airplanes, closely-held business interests, and other property of value owned by the decedent

• Guidance on post-mortem disclaimer planning

• Assistance with management of creditor’s claims, recovery of property, payment of debts, and trust administrative expenses

• Guidance to surviving spouses, family members, and other beneficiaries regarding the most efficient methods for transferring assets

Tax Filings and Minimizing Tax Liabilities 

When an individual dies there will be two types of taxes due, the estate tax, more commonly known as the death tax, and the decedent's individual income taxes.

Both types require careful thought and planning to minimize the tax burden. Decisions to be made may include which fiscal year to use if income should be accelerated, if a trust will be involved, what deductions are needed and which return will they most efficiently be used on.

In preparation for taxes, it's also necessary to determine what is the most beneficial valuation date to be used for the valuation of property. This could be either the date of death or the alternate valuation date.  Knowing which date is more beneficial can result in a reduction of the overall estate tax creating significant savings for some estates.

Another strategy that can be utilized for a surviving spouse may be the use of a decedent’s unused exemption from the estate tax through a portability election. Since death is a tax qualifying event, a surviving spouse has the option to elect to use the marital deduction through a disclaimer if it is determined to be beneficial.

At North Carolina Estate Planning & Fiduciary Law, our knowledgeable attorneys can help employ effective strategies to mitigate exposure to the federal estate tax, fiduciary tax, income taxes, generation-skipping transfer tax and other potential tax liabilities that may arise.

What is a Disclaimer and How to Use It to Your Advantage

A disclaimer is an election made by a beneficiary to refuse assets or property they would otherwise receive from a decedent. Once property is disclaimed, it  then passes as if the intended recipient died before the decedent who left them the property.  Generally a disclaimer occurs without any negative consequences, however, when used properly it has the potential to result in positive benefits.

Postmortem Planning through Trusts 

Another way to change the flow of property may be to revise or amend the terms of a trust agreement that no longer works. Often this can be done through non-judicial settlement agreements, and depending on what specific terms are being revised, it may or may not require judicial approval or other consents.

In addition another effective method of post-mortem planning with trust agreements is done through decanting. Decanting is simply transferring assets from one undesirable trust to another more beneficial trust. However, in order to decant assets from trust to trust, certain requirements must first be met.

At North Carolina Estate Planning & Fiduciary Law, our attorneys help individuals, fiduciaries or anyone else faced with administering a decedent’s estate or trust navigate through the intricacies involved in order to effectively maximize the potential savings and create a beneficial outcome.

f you need assistance in planning for post-mortem elections and decisions, or help in administering an estate, our attorneys offer a full spectrum of legal services surrounding estate planning, including estate and trust administration. We understand the ever changing nature of both tax and legal issues that can have a significant impact on estate planning and can assist you in overcoming obstacles to help you maximize savings for your loved ones. For guidance on effective planning options available, contact us for a confidential consultation at 704-248-6325 or complete our online form.