Top 7 Costly Estate Planning Mistakes and How To Avoid Them

1. Where There Is A “Will” Is There Is A Way? The biggest mistake is the failure to plan, having the wrong plan or even having an outdated plan. Everyone can benefit from a will or some other form of estate planning. Avoiding or reducing estate taxes, saving estate administrative costs, specifying who will receive your estate and protecting your family are just a few of the benefits a will can achieve.

2. Understanding the Death Tax System. If you are married, with proper planning you and your spouse can shield double the state and federal exemption amount ($5.0 million federal and $675,000 for New Jersey) from estate tax. The mistake occurs when the first spouse dies and leaves their entire estate to the surviving spouse thereby in effect losing the deceased spouses individual exemption amount. Instead, it is often beneficial for the spouse to leave all or a portion of their estate to a simple trust called an exemption trust (also know as a credit shelter trust).

3. Should Assets be Jointly Titled? Joint assets often have a right of survivorship which transfers ownership at death to the joint owner by operation of law. This bypasses the will. Since probate in New Jersey is relatively straightforward, instead of being an advantage, joint ownership can interfere with an estate plan.

4. What Are The Benefits Of Beneficiary Designations? IRA And Retirement Plan Distributions. A well thought out estate plan can be undermined by an incorrect beneficiary designation. The most common error is naming minor or irresponsible beneficiaries. A trust may be a better designation. Also consider a “Stretch IRA”.

5. Can Life Insurance Be Improperly-Owned? Life insurance death benefits are not subject to income tax. However, they are subject to estate taxes if the policies are owned by the insured at death. A way to avoid this is to have life insurance owned by an irrevocable life insurance trust.

6. Gifting When You Shouldn’t And Not Gifting When You Should. When properly applied, gifting can be an extremely effective way to reduce estate taxes. However, many individuals incorrectly assume that gifting is simple and fail to obtain competent advice.
7. Hiring A Generalist. When hiring a doctor, attorney, mechanic or any type of service profession, I strongly recommend hiring a specialist. Almost without exception, the specialist will have more experience and skill in their area of specialty than will a generalist. This usually translates into higher quality services provided in the most cost effective manner possible.

Comments - Top 7 Costly Estate Planning Mistakes and How To Avoid Them

  1. meditation techniques for beginners

    My partner and Iabsolutely love your blog and find almost all of
    your post’s to be just what I’m looking for. Do you offer
    guest wrikters to write content to suit your needs?
    I wouldn’t mind creating a post or elaborating on a few of the subjects you write with regards
    to here. Again, awesome site!

  2. private eye to catch

    I do not know whether it’s just me or if perhaps everyone
    else experiencing issues with your site. It looks like some
    of the written textt within your content are running off the screen.
    Caan somebody else please provide feedback and let mee know if this is happening to them as well?
    This may be a problem with my browser because I’ve had this happen previously.

  3. meditate techniques

    These are really enormous ideas in concerning blogging.
    Youu hazve touched some pleasant things here. Any way keepp up wrinting.

  4. seo articles writing

    wonderful points altogether, you just received a new reader.

    What could you suggest about your post that you simply made some days
    ago? Any certain?

  5. Delphia

    I’m more than happy to discover this web site. I wanted
    to thank you for your time for this fantastic
    read!! I definitely liked every little bit of it and I have you saved as a
    favorite to check out new things in your blog.

  6. domain

    Thank you for every other informative website. The place else could I get that kind
    of info written in such a perfect manner? I’ve
    a undertaking that I’m just now working on, and I’ve been at the glance out for such information.

Leave comment