Top 5 Estate Planning Mistakes
1: Not properly Funding Your Trust or Coordinating Your Assets with Your Trust - For Example: Your house gets refinanced and not retitled to your trust and later triggers a probate action (probate is bad because it’s typically 5x the cost of a trust administration and can take 12 – 24 months on average and it opens your estate to public inspection). Another example might be failing to add your trust as a contingent beneficiary on your life insurance policies after your spouse or properly coordinating your retirement beneficiary forms with your trust.
2: Failure to Update Your Trust - For Example: Old A/B trusts for married couples – Upon the death of the first spouse, the trust splits into a Survivor’s Trust and an irrevocable Bypass Trust (aka A/B trust) The disadvantage to this form of plan is that the assets in the Bypass Trust could be subject to capital gains at the death of the second spouse. Because the Federal estate tax exemption is so high (5,490,000.00) many older trusts no longer need this type of complication that could lead to more taxes for the beneficiaries.
3: Failure to Talk to Your Parents About Their Estate Planning - Pretending like it doesn’t matter will only lead to tragedy down the road. The best thing to do is to have an open discussion letting your parents know you want to be there in the event of a medical emergency and therefore it makes sense to talk about the documents they have in place.
4: Not Protecting Your Children from making bad decisions with their inheritance while they are young and immature and from a future divorcing spouse, lawsuit, bankruptcy, or other creditor. Protective trusts can be built into your trust and Retirement Protector Trusts can provide a lifetime of income to your children or other beneficiaries.
5: Not Doing Anything at All - The consequences are conservatorship or probate and there is no opportunity to protect those you love from future risks. Having someone other than who you’d want in charge of your health or finances if incapacitated is an expensive and long process to put your family through and under intestacy laws (no will) someone you did not intend to inherit from you, could be the beneficiary of your estate.
The first ten people to contact our office with the special Code “Jolly”, will receive a free copy of my book, “Secrets of Great Estate Planning” If they call or connect with us by December 10th. Call (760) 448-2220 or contact us through the website on our contact us page at www.geigerlawoffice.com