This module centers around the topic of the liquidity needs of an estate at death. Planning for liquidity can be done both premortem and postmortem. Many strategies are discussed that can be done premortem to either reduce the liquidity needs or increase liquid assets of an estate. Postmortem actions, though limited mainly to the reduction of taxes owed by an estate, or a delay in payment of such taxes, can often have a larger effect on liquidity. These postmortem actions, available primarily only to the personal representative, are explored in detail. Postmortem actions available to other persons interested in the estate, such as a will contest, are also mentioned.

6-1: Analyze a situation to identify existing or potential estate cash requirements and/or sources of estate liquidity
6-2: Identify the characteristics and purpose of a given premortem liquidity planning technique
6-3: Analyze a situation to identify premortem planning techniques that could be used to meet estate liquidity needs
6-4: Evaluate a situation to select a premortem planning technique that can be used to meet estate liquidity needs and that is consistent with a client’s stated objectives or situation
6-5: Identify the characteristics and purpose of given postmortem planning technique
6-6: Analyze a situation to determine the eligibility of an estate or its beneficiaries to use a given postmortem planning technique
6-7 Evaluate a situation to select the postmortem planning technique that are available and advisable for an estate or its beneficiaries

Author: Kirsten Waldrip, JD, LL.M.

Kirsten Waldrip, JD, LL.M., is an associate professor of estate planning and taxation at the College for Financial Planning. Kirsten worked in private practice as an estate planning and administration attorney prior to joining the College. She graduated from Arizona State University with a bachelor’s degree in interdisciplinary studies of business and communication, she received her JD from Syracuse University College of Law, and she received her LL.M. from University of Denver. You can contact Kirsten at kirsten.waldrip@cffp.edu.

Complexity Level: Advanced