13 Smart Estate Planning Moves for 2021

Atty. Chris Berry gives 13 Smart Estate Planning Moves that you can do to have effective Estate and Legacy Planning.

Estate Attorney and Advisor Chris Berry of Castle Wealth Group answers questions on retirement and estate planning every Wednesday at 1pm. Register via this link or give our office a call at 844-885-4200.

Castle Wealth Group and Christopher Berry help families with estate planning, elder law, retirement planning, and tax planning from their offices in Brighton, Ann Arbor, Livonia, Bloomfield Hills, and Novi.

Castle Wealth Group helps families with their legal, financial, and tax planning for their retirement and legacy.

With the use of legal structures like revocable living trusts, Castle Trusts (asset protection trusts), Chris Berry and Castle Wealth Group can help your family plan, protect, and preserve what is important through their Retirement and Legacy Blueprint Process.


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Episode Transcript

13 Smart Estate Planning

Hey, this is Chris Berry with Castle Wealth Group, and today we’re going to talk about 13 smart estate planning moves where if you follow this estate planning checklist for you and your heirs, you’ll hold onto more of your hard earned money. And if you like this information, please make sure to subscribe and sign up for notifications so that you’re notified whenever we release new videos, which is almost daily.

Christopher Berry is a leading estate attorney and advisor in the area of retirement and legacy planning. He has been featured in publications such as Forbes, Kiplinger’s, Crain’s Detroit, and more. He’s the host of the weekly radio show and podcast, The Chris Berry Show. He’s a national thought leader as it relates to retirement and legacy planning, and has author of the Amazon best selling book, The Caregiver’s Legal Guide

So today we’re going to talk about some smart estate planning moves. And I’m not just talking about your legal documents, I’m really talking about legacy planning. So the first thing would be to rethink your IRA investing strategies. So IRAs are pre-tax accounts, and now if you leave those pre-tax accounts to the next generation, with the Secure Act, your beneficiaries are going to have to pay taxes on that within 10 years. Prior to the Secure Act, which passed in 2020, they could stretch out the taxes over their lifetime. So now under this compressed tax structure, that’s going to cause them to pay more taxes, so it might be time to rethink where you’re saving your money. Maybe we shouldn’t be over-funding or over contributing to those 401ks or traditional IRAs.

Number two, think about sneaking in Roth conversions. One of the strategies that we really like to employ a Castle Wealth Group is when we look at retiring, not necessarily taking a social security right away. Now, you might be asking, well, how do I cover my income needs? Well, if your income drops because you retired, now’s an opportune time to start pulling money from the IRA A, for your income, and then B, you can sneak in yearly Roth conversions. We call this bracket bumping, where we look at your tax brackets, figure out how much we can do a Roth conversion, and fill up that tax bracket.

Number three, we could leverage the annual gift tax exclusion. So if you’re looking to leave money to the next generation, you have a lifetime gift tax exclusion that’s tied to your estate tax, but also you have an annual gift tax exclusion. And this year that annual gift tax exclusion is $15,000. So you can get $15,000 to as many people as you want gift tax free.

Number four, use up your lifetime gift tax exemption early. So I mentioned this in the previous one, but you also, in addition to having an annual gift tax exclusion, you have a lifetime gift tax exclusion, and that lifetime gift tax exclusion is tied to the estate tax, and we call that the unified credit, where now your gift tax is tied to your estate tax, which right now is at $11 million, and so you can gift in your lifetime up to $11 million.

Number five, pay medical or educational expenses directly. So there’s different strategies here, things like 529s, or gifting directly to these different institutions.

Number six, consider building an irrevocable trust, or a state tax trust for your spouse. There’s different strategies here, especially if you’re concerned where estate taxes are going. Based on the Biden Administration, they’ve talked about lowering that estate tax. So there’s some things that you can do to maybe put your spouse and loved ones in a better situation.

Which also takes me to number seven, bypass the need for a portable exemption. So right now, the way that estate taxes work is that you have an estate tax exemption of $11 million, but also your spouse has one, and through the use of either portability or special types of trusts, you can double that exemption. So in essence, you can leave double whatever the single estate tax exemption is by making sure to lock in both spouses exemptions, if you’re a married couple.

Number eight, safeguard assets from creditors. This is a big one, when I’m talking about creditors, I’m not just talking about getting in a lawsuit or a car accident, I’m also talking about long-term care costs and future health care costs. There are certain types of trusts that you can set up where if you make it five years, everything inside of the trust would be protected from that nursing home or Medicaid spend down.

number nine, make sure to use a trust as a probate avoidance tool. Trusts are probably the best probate avoidance tool, assuming that you fund the trust, making sure that you have the assets in the trust. A trust is kind of like a suitcase, you need to make sure there’s stuff actually in the suitcase.

Number 10, plan for Medicaid and special needs. So it’s not just about protecting from creditors and lawsuits, but also it’s protecting from nursing home care, Medicaid spend down, as I mentioned, but also if you’re leaving anything to the next generation, especially if any of your beneficiaries or children are on governmental benefits, it’s important to make sure that you don’t leave these things outright to them, but you leave them to your beneficiaries in such a way that if they are receiving governmental benefits, they’re not going to be disqualified.

Number 11, reduce fees for a simple estate. So understand not everyone needs a trust. If you have a very simple estate where you’re comfortable giving things outright, and you’re not concerned about long-term care costs, or nursing home care, then maybe a trust isn’t the right fit. Instead we could rely on a will-based estate plan with just the lady bird deed. So that would reduce the cost of setting up your estate plan.

Number 12, clean up your investment clutter. So this is all about getting organized, and it’s one of the things that we really focus on at Castle Wealth Group is helping people get organized in terms of their retirement and legacy planning. It’s time to simplify. Maybe we don’t need 15 different investment accounts, maybe we can start simplifying.

And then number 13, consider having a family meeting with your family. So this is something that’s very important, we do it quite often at Castle Wealth Group, is that a lot of times when someone sets up an estate plan and creates this legacy, they need to make sure that their other family members, their beneficiary, successor, trustees, understand what needs to happen if something were to happen to them. And so we do a lot in terms of education, where we have successor trustee workshops, as well as we have family meetings, where we don’t get into how much money does mom and dad have, but we do almost a fire drill. If mom and dad were to pass away, what do we need to do? Or what are the steps that are necessary to make sure that everything goes as smoothly, as efficiently as possible?

So those are 13 things to think about with regards to estate planning, putting more money in your pocket versus leaving it to a nursing home, or a probate, or the IRS, making sure things are as smooth as possible. If you liked this information, please make sure to subscribe to our YouTube channel. Thank you so much, take care.

Castle Wealth Group as clients across the nation, and helps families plan, protect, and preserve what is important by creating a retirement and legacy blueprint.



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