Ask anyone about estate planning and it is likely you will find a blank stare because no one wants to talk about the inevitable. Estate planning is something people would rather not think about until it becomes unavoidable. Even when people do plan for it, without the assistance of an estate planning attorney to act as a guide, the outcome often comes out as unsatisfactory as they were not able to get proper legal advice to minimize tax obligations and other stuff. Here are some tips your estate planning attorney recommend you avoid when considering estate planning.
Waiting Too Long
Your estate planning attorney recommends that you do not wait too long to make one. If you become incapacitated because of illness, age, injury or disease, there is nothing worse than having one or all of your beneficiaries and heirs fight over your assets. When this happens, there is no recourse but the court to make important decisions that will determine who gets what. This is something you do not want to happen as the person that might get assigned may not have your best interests in mind. It is never too early to consult an estate planning attorney in order to start strategizing. Plans such as how to avoid probate, create a legal will, draft a trust and name people you trust to take care of your personal affairs.
Not Updating Your Estate Plan
Sure you may have already drafted an estate plan but that was 15 years ago when you were single, had no kids and almost nothing to your name. While you did the right thing of prepping the legal documents for the inevitable, you did not update your estate planning attorneys about the changes in your life since you drafted the original document. You now currently have 4 kids, one ex-spouse and heart disease. What you should have done is to have your will updated to reflect your current circumstances. Make sure that your real estate property is titled to the trust and instructions are done in detail to ensure your kids are taken care of.
Did Not Consider Estate Tax
Ask any estate planning attorney about estate tax and they will tell you that your estate will not get taxed unless it is valued at $5.43 million for single individuals and $10.86 million for married couples. As you advance in your status in life more and more people achieve an estate value at this level so it is a must that you talk to your estate planning attorneys to have your estate appraised and if the value on the documents indeed higher or is growing at the moment, you might consider gifting some of it in order to reduce the estate value. For example, you can gift your heirs or beneficiaries up to $14000 annually and married couples can gift up to $26000 per year per person using funds coming from one partner’s property.
You Alone Know You have An Estate Plan
Can you think of the reaction your friend gets when they realize that you have designated them as legal guardian to take care of your minor children after you become incapacitated? Or, certain pieces of jewelry or important personal documents a close relative believed he would inherit but find out later was meant for somebody else. It is vital to let your legal heirs know what items you wish to give them so that any violent reactions and arguments may be discussed while you are still in control of your faculties. If you find that the person you designated as the legal guardian is not interested to take care of your kids or is incapable to do so then you can inform your estate planning attorney about naming someone else to carry the burden.
No Funding For Your Trust
Many estate planning attorneys has seen this situation: Setting up a trust is a good thing but now you need to fund that trust with some personal assets. Your estate planning attorney can advise you on what types of assets can be placed in it so you are able to avoid probate along with the cost and delay that comes with it.
Doing It DIY Style
Sure there are a lot of online help sources on estate planning available out there but there are so many horror stories of people that did estate planning on their own without the help or sound advice of an estate planning attorney. Your lawyer can do more than draft the document for you. He can help set up various trusts and also provide some advice on other trust instruments too. Your estate planning attorney can also give you advice on advanced health directives, having a pour-over provision in your personal will as well as counseling on how to efficiently fund and administer the trust for the sake of your heirs and beneficiaries.