It is easy to make mistakes in estate planning if working alone.
Are you considering creating your own will from a website?
According to a recent Kiplinger article titled “10 Surprisingly Common Estate Planning Mistakes,” you could unintentionally create a nightmare for the courts, a huge tax burden, and stress for your loved ones.
What are some examples?
How long has it been since you reviewed your beneficiaries?
Have you had major life changes?
You will need to revisit.
You will also want to name a contingent beneficiary.
This often means your estate is the contingent.
This means distribution of these assets will take longer and they will subject to creditors.
Want to avoid capital gains taxes on your property and remove it from your estate?
Do not sell the land for a low price.
The IRS will consider it a gift if below market value.
What does this mean for your estate?
The heirs will lose the step up in basis.
Specific Investment Bequests.
Specific bequests are first to be handled in an estate.
If you do not own the investment anymore, you could put your estate in trouble.
The estate could have to buy the investment back at a higher price.
This will leave fewer assets for other beneficiaries.
Do you want the home to go to your children and not allow it to be sold?
This could put your children in a tough situation.
They may need to sell it.
The court process to receive this permission will be lengthy and costly.
If you leave money directly to a minor, he or she is unable to access it until a certain age.
You will need to select a guardian.
You will also need to designate someone to oversee the money.
This could be the same person.
It could be someone else.
Either way, the decision should be made by you.
You had two beneficiaries.
Who gets his or her share?
Does the first beneficiary?
Or is it the family of the second beneficiary?
You will need to designate
Work with an experienced estate planning attorney to determine the default laws for such instances under the laws of your state and plan accordingly.
Are all or most of your assets owned buy one spouse?
This could create more taxes.
Dividing your home or investments accounts more equally might reduce the amount of taxes owed when the first spouse dies.
Missing Residuary Clause.
What is a residuary clause?
This clause addresses any assets you forgot to mention in the specific distribution provisions of your will or were owned after the will was created.
Estate planning involves many considerations.
Some of these might be best addressed in a trust where more direction can be given.
Think you are untouchable?
You are wrong.
You will die.
No one knows but God.
Face the reality and start planning.
Work with an experienced estate planning attorney to get your affairs in order and avoid these and other commonly overlooked mistakes.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: Kiplinger (June 1, 2018) “10 Surprisingly Common Estate Planning Mistakes”