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Estate Planning, Asset Protection

and Coronavirus (COVID-19)

What is happening in this country with Coronavirus (COVID-19) is both troubling and fear-inducing, especially for those with pre-existing health conditions, weakened immune systems, and in vulnerable age groups. We have all been forced to take a “time-out” from our daily life, where we prolonged or set aside the organization and documentation of important legal and financial decisions. Now, faced with this pandemic, many of us wish we had been more proactive with respect to future planning. It is not too late!

Even in these unprecedented times, we are available to help you make and document these important decisions. Below you will find Things You Can Do Now to Protect Your Family for critical steps and techniques that may offer you peace of mind in an otherwise chaotic world; Additional Estate Planning Strategies in a Down Market; and information about the Secure Act which regards IRAs. We also feel that the information in this article is helpful including some tips on getting your financial and estate plan in order:


by Donald Kress and John Harris of Coral Gables Trust as published in The Miami Herald.

After considering the information below, if you are a client, please contact us if you would like to make any changes to your current documents, if you wish to proceed with any additional estate planning, or if you have any questions or concerns. We are able to set up conferences by phone or video to assist you and meet your legal needs while keeping you safe and healthy. If you are not a client, contact your current legal advisor or feel free to contact us to set an appointment.

Very Truly Yours,

Barry Nelson

Jennifer E. Okcular

Cassandra S. Nelson

Things You Can Do Now

Estate Planning, Asset Protection and COVID-19: Things You Can Do Now to Protect Your Family


The Nelson & Nelson family is here to support our clients, colleagues, and friends and have implemented protocols to do our part to avoid any unnecessary risks of spreading COVID-19. We suggest that you take this time to review the current status of your estate plan and ensure that your existing documents align with your current wishes and circumstances. If you do not have an estate plan at this time, it is critical that you consider your current wishes and take the time to document them. We recommend that you take the following actions at this time:

  1. Review the terms of your Last Will and/or Revocable Trust, if any, to ensure that such documents reflect your current wishes. If you have other estate planning documents, review those terms as well to ensure they align with your current situation.

  2. Review your durable power of attorney, health care surrogate, living will, and other ancillary documents to ensure they are current and that you still desire to have the person(s) designated to serve as your decision maker.

  3. Review the owner and beneficiaries of your retirement plans, annuities, and life insurance plans to ensure that the individuals listed as beneficiaries of such still reflect your desires. Consider contingent beneficiaries in case the primary beneficiaries do not survive you. This is especially important in light of the new SECURE Act, which went into effect this year.

  4. If you are in a position to do so, consider taking advantage of available income, gift, and estate tax strategies. Some of the most important strategies and topics are described below.

  5. Contact your financial advisor and/or CPA to review your asset allocation to manage your investment risk going forward and to make sure that it aligns with your current financial circumstances.

Estate Planning in Down Market

Additional Estate Planning Strategies in a Down Market


If you are financially able to initiate planning at this time, several estate planning techniques can be utilized in light of the recent stock market correction and depressed economy. If you believe in the long-term growth potential and valuation of equities, then depressed market prices combined with a historically low-interest rate environment may offer planning opportunities.


Grantor Retained Annuity Trusts - GRATs


A Grantor Retained Annuity Trust (“GRAT”) is an irrevocable trust that pays the Settlor (or “Grantor”) of the Trust an annuity for a fixed term of years (we typically use two year durations). The Grantor can create a GRAT by transferring cash or appreciable assets in trust while retaining an annuity interest. Upon creation of the GRAT, the Grantor determines the amount of the annuity payment. The greater the retained payments the smaller the taxable gift when the GRAT is created. If the Grantor dies before the expiration of the GRAT term, generally all GRAT assets are included in the Grantor’s estate at the current fair market value at date of death and the benefits of the GRAT are not realized. However, if the Grantor survives the term, any property remaining in the GRAT after the last annuity payment, including appreciation, will pass to the remainder beneficiaries (usually the Grantor’s children), without being subject to gift tax. This is a great technique to pass wealth to your children without paying significant gift tax during a low interest rate environment.  If the assets appreciate by more than approximately 2% per year (based upon the IRS rate in existence at the time of the gift), the excess appreciation at the end of the GRAT term can pass to intended beneficiaries free from estate tax.




You can gift up to $15,000 per year (or $30,000 if you and your spouse, if any, elect to split gifts) to any person and to an unlimited number of individuals, without paying gift tax. During a stock market correction, you may leverage these gifts by gifting shares that have decreased in value, but which you expect will recover in later years (i.e., you may make a tax-free gift of shares that have depreciated in value and when the value of such shares rises, they will no longer be part of your taxable estate and the donee will retain the appreciated shares). Larger gifts can be made to your children and grandchildren as well via trust or outright distributions to utilize the current exemption amount of $11.58 million before the existing exemption amount sunsets on January 1, 2026 or earlier based upon the political and financial climate.


You can also consider making gifts to a Spousal Lifetime Access Trust (a “SLAT”), which provides a gift to the donor’s spouse and locks in the current $11.58 million exemption. When you combine the reduced values due to the economic downturn with the valuation discounts for gifts of minority interests, now is a great time to make gifts for those who can afford to do so.


Leveraged Gifts


Gifts can be leveraged by using discounted values of businesses that are currently suffering from the economic downturn.  Closely held businesses typically qualify for discounts for lack of marketability and minority interests.


Refinancing Loans

We recommend that you review any outstanding loans that you may have to members of your family or trusts created for their benefit. If there is no prepayment penalty and you can survive without the cash flow, then, because the applicable federal rate (the “AFR”) is likely to be lower at this time (a loan of more than three years, but no more than nine years only requires 1% interest for loans made in April 2020), you can refinance at the lower rate to reduce the amount of assets in your estate in the future.

Secure Act

Secure Act


The SECURE Act, which became law on January 1, 2020, makes significant changes to the treatment of 401(k), IRA (Individual Retirement Account), and other types of retirement accounts. These changes may impact your existing estate plan and have certain tax implications for you and your family.

Prior to the SECURE Act, a named beneficiary could withdraw an inherited IRA in payments over his or her lifetime based on IRS actuarial tables. The SECURE Act eliminates the “stretch IRA” and forces most retirement plan beneficiaries to withdraw the entire balance of their inherited IRA – and pay income taxes on such withdrawals – within 10 years of the owner’s death. The only exceptions to the 10 year rule are: surviving spouses, minor children during their minority (the 10 year rule will begin upon attaining the age of majority), persons not more than 10 years younger than the plan owner, or beneficiaries either disabled or chronically ill.


Estate and financial advisors have been studying the SECURE Act to be able to provide suggestions to our clients as to the possibility of revising beneficiary designations. Each situation is somewhat unique and review of your current beneficiaries is necessary.

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Disclaimer: This information has been prepared for educational purposes only and is not offered, nor should be construed, as legal advice. Use of this information without careful analysis and review by your attorney, CPA, and/or financial advisor may cause serious adverse consequences. Absolutely no warranty or representation of any kind, whether express or implied, concerning the appropriateness or legal sufficiency of this information as to any individual’s tax and related planning.

The following notice is required by the IRS: Any U.S. federal tax advice contained in the articles and information in this web site is not intended to be written or used, and cannot be used or relied upon, to avoid tax-related penalties under the Internal Revenue Code, or to promote, market or recommend to another any tax-related matter addressed herein.

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