Navigating the Four Critical Weeks: Estate Planning Before and After Death

Trust and estate planning is a sensitive and practical endeavor that takes on heightened significance two weeks before and after a client’s passing. This blog delves into the essential considerations and strategies to assist in an easier transition for clients and their families. At the Heckerling Institute, leading practitioners Thomas D. Yates and Shane Kelley discussed the four critical weeks in estate planning. 

The Two Weeks Before Death: Prioritizing Precision and Compassion  

Two weeks before a death brings uncertainties and fear to all affected. Rather than facing this moment alone, mitigate potential stressors by being prepared. Understanding the necessary steps before death makes you feel peace of mind when estate planning and navigating this difficult, emotional time.  

Understanding the Emotional Landscape 

Facing imminent death is emotionally charged and complex, as many families often grapple with grief, uncertainty, and the urgency of finalizing affairs. The role of a trusted advisor, including the family accountant and estate planner, is critical in providing guidance and maintaining clarity during this challenging time. 

Who To Speak to and How 

When speaking to a professional, verifying the credentials of who you are talking to and confirming that the professional is authorized is imperative. Verify that emails are accurate, telephone calls are from valid family members, and do not take steps that could jeopardize the confidentiality of the near-death client. 

Accessing and Organizing Essential Documents 

Key steps include locating and reviewing:

• Review wills, trusts, and beneficiary designations. 
• Safeguard critical passwords and have access to safety deposit boxes 
• Powers of attorney (POA) – each state has unique laws on what a power can and cannot do. Include the ability to gift on behalf of the client using the power of attorney (more details below).  
• Healthcare proxies.  
• Digital assets such as online accounts and cryptocurrency details. Tax returns and other tax details.
• Family agreements like pre-marital contracts and buy-sell arrangements for businesses. 

A thorough inventory of assets and liabilities is crucial. Remember, anyone with access to the home or other assets may use this time to take what they think they should get.  

 Leveraging Powers of Attorney (POA) 

A robust power of attorney is the cornerstone of end-of-life planning for clients facing incapacitation. An agent empowered by the POA can address tax and non-tax concerns, from transferring property to making strategic gifts. However, these authorities must align with the principal’s intentions and the governing legal framework. 

Critical Actions: 

• Confirm the validity and scope of the POA under the applicable state laws. 
• Address “hot powers” like altering beneficiary designations, which require explicit grants of authority. 
• Evaluate the agent’s fiduciary duties, making sure they act in good faith and prioritize the principal’s best interests. 

Income and Transfer Tax Strategies 

End-of-life planning offers unique opportunities for income and transfer tax optimization. Some strategies are as follows: 

• Annual Exclusion Gifts: Utilizing the $19,000 federal gift tax exclusion (2025). If the client gifted in December 2024 – gift again in early 2025. A spouse can split gifts to double the amount out of the estate. Be careful with checks, as they must get cashed quickly before death.  
• Transfer Tax Planning maximizes valuation discounts and, if possible, utilizes Generation Skipping Transfer (GST) tax exemption.  
• Implement spousal trust planning – Either a QTIP (Qualified Terminable Interest Property) Trust or a SLAT (Spousal Lifetime Access Trust).  
• 529 Plans: Contributions to educational savings accounts qualify for gift tax exclusions. Consider funding for all family members who can use it. A grantor can frontload 5 years’ worth of 529 plans in one year, but if the grantor dies during that term, the remaining gifts return to the estate.  
• Accelerate Income: Consider pulling withdrawing money from IRA accounts prior to death. A final 1040 can shelter this income if there are large healthcare expenses (private medical care) and charitable contributions. Income tax payment is one way to reduce the estate if there is a taxable estate. 
• Medical and Educational Expenses: Direct payments for these expenses are exempt from gift taxes and reduced estate, and nonrefundable tuition can be pre-paid. 
• Basis planning – Capital assets generally get the step-up on the basis owned by the decedent at death or in a QTIP or general power of appointment (GPOA) trust. Where a surviving spouse is a beneficiary of such a trust included in the estate or credit shelter trusts, there will be no estate tax. Consider using the trustee’s broad discretionary powers to distribute low-basis assets to the dying beneficiary for step-up of these assets. For intentionally defective grantor trusts, consider swapping high-basis assets with low-basis assets of a client’s grantor trust in which the grantor has swap powers.   

Planners should anticipate liquidity needs for tax payments and other obligations to make sure sufficient funds are accessible in the estate or trust. 

The Two Weeks After Death: Transitioning to Administration 

The advisor focuses on implementing the estate plan and final income tax returns. Central to this phase are the questions of authority and the scope of powers granted to executors and trustees. Practitioners must navigate ethical dilemmas, dysfunctional families, and grieving family members. 

Handling Immediate Post-Death Tasks 

When a loved one passes, immediately handle these tasks. 

• Just as confidentially does not cease prior to death, the same rule applies after passing. Be sure you know who you can discuss matters with. 
• Securing Property and Assets: Safeguard the deceased’s belongings against loss or disputes. Issue new keys to secure homes and contents (art collections, jewelry, etc.), keep cars unused, and notify the family of such. 
• Funeral Arrangements: Advise on burial, cremation, and other preferences documented in the estate plan. Who can make these decisions? Explicitly follow what is stated in the will. 
• Initial Asset Management: Manage accounts and investments until the executor is formally appointed. 
• Tax returns: File returns and extensions and verify that the appropriate person is signing the return, such as a successor trustee for a Revocable trust, a surviving spouse, or a court-appointed representative. 
• Estate tax returns: professionals must work together to make sure everyone knows their responsibilities.  
• Venue for Probate: Since states have different rules, look to the state where domiciled or where the property is owned. 
• Executor’s Role and Powers: Before formal qualification, executors can take limited actions to preserve the estate. After qualification, they gain full authority to settle debts, distribute assets, and manage ongoing obligations. Adhering to the deceased’s wishes and legal requirements is paramount. 

Digital Assets and Modern Challenges – New issues and problems to consider  

The ownership of digital assets introduces new complexities. Under the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), agents and executors must: 

• Secure specific authorizations for accessing electronic communications, as these are above the regular POA’s jurisdiction. A specific person is designated in the will to access digital assets.  
• Manage digital property responsibly, aligning actions with fiduciary duties. Planners should encourage clients to maintain updated digital inventories and provide clear instructions for access and control. These assets, and several others, will require 2-code verification to access. Be sure the phone and password are accessible. 

A Balancing Act of Precision and Empathy 

The two weeks before and after death represent a condensed timeline of high-stakes decisions and emotional intensity. Professionals have a unique opportunity to provide invaluable support, combining technical experience with compassionate guidance. By addressing legal, tax, and personal concerns with equal diligence, partnering with a trusted professional allows for a smooth transition that honors the client’s legacy.  

Contact us today to learn how EisnerAmper can be there for you and your loved ones in your time of need.