Estate Planning Mistakes

COMMON ESTATE PLANNING MISTAKES

Document Errors in Your Will or Living Trust

One of the most common mistakes is to not keep your will current. Mistakes can include heirs being left out or deceased parties being named as the executor. Your will or living trust should be regularly reviewed at least:

  • On marriage, divorce or separation of anyone named in the will
  • At birth, adoption or death of a child
  • Upon major changes to the tax law
  • Upon moving to a new state

Your well drafted living trust or will may include errors simply from the passage of time which will create avoidable headaches for your loved ones.

Leaving Everything to Your Spouse

If everything is simply left to a surviving spouse, planning opportunities may be left on the table which can end up being costly. When the survivor receives everything, everything they receive is layered on top of any other assets they may already own. This can bring them closer to taxable amounts. Use of a living trust can ensure that all available exemptions are absorbed.

Lack of Liquidity

Most people have no idea what it may cost to settle their property or how quickly taxes or other expenses must be paid. They need to realize and plan for enough cash to be available to cover expenses and avoid a fire sale on property.          Expenses that can demand immediate cash include:

  • Estate Taxes
  • Income Taxes
  • Administration Costs
  • Maintenance of Family
  • Operating expenses for Family Business

Poorly Planned Distributions

Equal distributions among family members are a common option. This arrangement can ignore the simple fact that needs and circumstances are not necessarily equal. Consider a family with a special needs child and three healthy siblings. Should each child receive an equal share?

Whether your planning needs are a will or a living trust we can help. At Estrada-legal, PC, we believe your family is your most important asset.