Five Errors to Avoid in Estate Planning

Everyone looks forward to the new year and its promise of new opportunities. Did you know the old year might also yield rewarding returns? As you look ahead, consider some year-end decisions that can make a big difference, not just for the new year, but for many years to come.

There are a number of pitfalls to avoid when planning your estate. Poor planning is one of them and can result from a mere omission in assets or failure to plan. Another pitfall can involve making the wrong decisions about how to transfer your assets to the people and organizations that mean the most to you. Here are five of those errors:

  1. You Don’t Have a Plan
    Many people don’t realize they need a plan. As a result they fail to make a will or create a plan during their lifetime. Not having a plan means the distribution of your assets will be dictated by your state’s law. State “intestacy laws” typically leaves a percentage of your estate to your family, but you have no say in how your property is divided or who gets what. Make sure you create a plan so that your lifetime intentions are carried out. Please contact us to receive a FREE guide to planning your will or visit our website to begin organizing your estate with our online Wills Planner.
  2. Using Online DIY for Legal Help
    Because the Internet makes it seem easy to prepare a will or trust online, some people do not feel the need to consult an attorney in their planning. However, these “do it yourself” plans often fail to take into account variations in state law. Worse, many of these
    plans would not hold up legally if there were a change in federal tax law. For these reasons, it is important to use an experienced estate planning attorney when creating your future plan. Please contact us if you would like to be referred to a qualified attorney who can help you achieve your goals.
  3. Failure to Properly Designate Beneficiaries
    Have you designated beneficiaries for all of your assets? If so, have you reviewed your designations recently? Most investment
    accounts allow for the designation of a beneficiary (IRAs, 401(k)s and company plans). Because all of these beneficiary designations absolutely control who receives your assets, it’s important to periodically review your designations. Please contact us if you or your attorney would like a copy of our bequest language for purposes of designating our organization as a beneficiary of your estate.
  4. Failure to Maximize Annual Gifts
    Gifting your property during your life is perhaps the oldest and best way to minimize future estate taxes. Many people fail to realize the prudence of making annual exclusion gifts each year to family members. Over the long run, you can transfer significant
    sums of money out of your estate and reduce your taxes. There are also strategies such as charitable lead trusts that can help you
    leverage your exemptions and allow you to give even more. To learn more about creative ways to help family and charity while reducing your taxes, please contact us.
  5. Failure to Take Advantage of the Gift Exemption
    Above and beyond the annual exclusion gift limit, you are permitted to make gifts during your life up to the federal gift exemption
    amount without owing any gift tax. Making lifetime gifts is a simple and effective way to minimize estate tax. Be sure to act now, and take advantage of the current generous gift exemption before it expires. Please contact us if you are interested in including our charity in your planning. We can help you create a plan that maximizes your gifts to your family in addition to helping us further our mission.

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