Is Your Vessel Missing from Your Estate Plan?

Leaving port with no plan, trusting serendipity to deliver a great cruise, only works in familiar territory. For a more complex voyage, every mariner will be prepared for issues like depths, tides and currents, weather and where to get a meal (and a cocktail!). Often, the more you plan, the better your trip will be and the better equipped you will be to navigate unforeseen occurrences.

Many yacht owners who dream of passing their vessel on to future generations will recognize the importance of a conscientious estate plan—but may be surprised to learn that many estate-planning approaches do not fully account for unforeseen complications with managing passion assets. Neglected estate plans can easily become outdated, leading to unpleasant surprises for heirs. Proposed tax-policy changes further complicate the estate-planning process and underscore the importance of revisiting your plan regularly to avoid creating unintended consequences. Some common problem areas that our experts see all too often include:

• Unforeseen complications with passion assets, such as vacation homes or art collections, which are difficult to value, hard to sell and expensive to maintain
• Parents who are surprised by the amount of wealth going outright to their children, particularly when the next generation might not be fully prepared to manage it
• Trust provisions that do not align with more contemporary goals like supporting entrepreneurship or environmental and social investment objectives
• Unused lifetime gift tax exclusions or generation-skipping transfer (GST) tax exemptions
• Closely held businesses, private equity investments and real estate accompanied by hard-to-pay estate tax bills

Stress Test Your Plan

Stress testing your estate plan will give you a clear picture of how its elements will unfold to ensure your lifetime, family and philanthropic goals will be fulfilled. Northern Trust has a proprietary approach to stress testing estate plans that can identify any surprises ahead of time. This process complements your estate-planning process, in close coordination with your attorney, to ensure your plan will play out as intended.

Learn more about how a stress test can uncover any surprises lurking in your plan.