Last week we blogged about several common estate planning mistakes people can make that can end up costing them a lot of money. This week we are going to continue our look at common mistakes by looking at three different issues that trip people up as they go about the estate planning process. As always, it’s vital to remember that you should never try to create an estate plan without the advice and guidance of an estate planning lawyer. As you go about this process, keep the following tips in mind so you can be sure to create an estate plan that is as trouble-free as possible.
Mistake 4. Believing your will or living trust avoids estate taxes.
Even though the estate tax issue is not nearly as important as it was in years past, it’s still a significant concern that some people need to plan ahead for. However, using a revocable living trust or a last will and testament as tools to try to limit how much you pay in estate taxes is a very bad idea. Neither of these two devices will do anything to reduce how much your estate might have to pay in taxes. If you want to eliminate or reduce the estate tax burden your estate might have to face there are tools available to you, just not your will or your living trust.
Mistakes 5. Forgetting about property in other states.
People who create estate plans today typically focus on probate avoidance or simplification. Put simply, probate is the collection of legal procedures that apply after you die and leave behind property. Every state has its own probate process, and each state makes specific requirements that people going through probate have to meet.
What this means for you is that if you own property, especially real estate, that is located in different states, your estate plan absolutely must take this into consideration. When you have real estate in multiple states, you can look forward to multiple probate cases. This means multiple attorneys, different probate processes, and different time frames that apply to each case.
Mistakes 6. Forgetting about your plan after you create it.
If you’ve been reading our blog for a while, you know that this is one the most important, and common, estate planning mistakes we like to talk about. When it comes to developing an estate plan, you need to look at it as a lifetime process. After you and your attorney create your initial plan, you need to count on revisiting it every so often. In the long run, regularly updating and changing your plan will allow your wishes to be easily followed by your family.
For more information on the subject of Trusts, be sure to attend one of our workshops in May. If you already have a will or trust and haven’t reviewed in 3 or more years, contact our firm to see how you can receive a complementary consultation with one of our attorneys to review your current documents.