The Details tab of RightCapital's Estate Analysis module provides a list of categories that, together, represent the monetary values reflected in the Estate flow chart. You can access this tab within the Estate > Analysis module of each and every client plan:
The Details page provides information in a more traditional table reminiscent of a balance sheet, as opposed to the flow chart's dynamic presentation. Here's you'll be able to see the individual assets and liabilities that make up each client's gross estate, the taxes and fees that will reduce their estates upon their passing, as well as the total to heirs and total to charity after the clients pass away:
In joint plans, the first client to pass away will be listed on the left, the second client to pass will be listed in the center, and assets held outside of the estate will be listed to the right.
Just like the flow chart, the values in this table will update in real time as you make adjustments within the Action Items at the bottom of the page. Click on the dropdown arrow below for more details on Action Item functionality within the Estate Analysis:
The Action Items allow you to fine-tune the details of a client's estate analysis. Here, you can update variables like funeral and probate expenses, play around with the impact of different planning horizons, and even propose trust strategies. The Action Items are divided into two columns: Basic Information on the left, and Trust Strategy on the right.
As a starting point, you will see the following items listed under Basic Information:
Client & Co-Client's Planning Horizon: The assumed age of death for each client. You can adjust the planning horizons to illustrate what changes will occur in the estate analysis if clients were to pass away at different times. Do note that changing the planning horizons within the Estate Analysis will not impact any other modules in RightCapital.
Funeral Expense: Funeral expenses will be automatically added to the 'Taxes and Fees' tiles within the analysis flow chart, reducing a client's estate before it is passed on. Funeral expenses should be entered in today's dollars; your General Inflation rate will be used to project this value in future dollars.
Probate Expense: Probate expenses will be automatically added to the 'Taxes and Fees' tiles within the analysis flow chart, reducing a client's estate before it is passed on. Probate expenses are entered as a percentage of the gross estate, excluding qualified accounts (see below).
Pro-Tip: Probate Expenses
RightCapital makes the assumption that qualified accounts such as 401(k)s and IRAs have beneficiaries assigned and will not go through probate. As such, qualified accounts are excluded from the probate expense calculation. Jointly owned assets (properties, business, lifestyle assets, etc.) are also excluded from probate upon first death.
In addition to the items above, you can also click the Edit button in the lower right of the Action Items to include several other items. These items include Cumulative gift, Gift tax paid, and DSUE amount:
Cumulative Gift: Generally, no estate taxes are due if the estate value is less than the lifetime gift/estate exemption. However, that exemption may be reduced throughout the client's life if they make gifts that exceed an annual gift exclusion ($18,000 in 2024). If a client has made gifts in excess of the annual exclusion, the total value can be entered in the cumulative gift field. The value entered in this field will reduce the gift/estate exemption threshold for that client.
Gift Tax Paid: This field addresses a scenario where clients make gifts in excess of the annual gift exclusion, but choose to pay the taxes in the year that the gift is made. The estate tax calculated will be reduced by the total dollar amount that you enter here.
DSUE Amount: Allows you to include any deceased spousal unused exclusion (DSUE) a client may have from a previous marriage. The value entered in this field will increase the gift/estate exemption threshold for that client.
Pro-Tip: State-Level DSUE
Only two states, Hawaii and Maryland, allow for the portability of any unused exclusion between spouses. All other states do not.
In addition to the Basic Information items described above, you can also use the Action Items to propose Trust Strategies. By adding a trust strategy, you can illustrate a scenario in which assets are moved from the client's taxable investments into a trust type of your choosing. Once added, the estate flow chart will update to reflect the impact of your trust strategy.
For more details on proposing trust strategies within the Estate Analysis, please reference the article below:
