WMUR’s recent article entitled “Common estate planning mistakes” gives us a few of the most common and potentially costly estate planning mistakes, along with help on how to avoid them.
Failing to plan. You delay and you delay. Most Americans don’t have a will. If you die without a will, your assets will be divided according to the intestacy laws of your state. There is no guarantee this would be consistent with your wishes. Whether an estate plan involves a basic will or perhaps a trust, having a plan can help reduce taxes, save on estate administrative costs, preserve privacy and speed up disbursement to beneficiaries. An estate plan can help direct how your assets are to be distributed. You can also designate a guardian for your minor children in your will.
Failing to maximize your marital estate exemption. Portability is an estate provision that can help with potential estates. Each person gets an $11.7 million federal estate tax exemption in 2021. If one spouse dies without using up his or her $11.7 million, the unused portion may be transferred to the other spouse for use at the survivor’s death. However, portability doesn’t address the appreciation of assets from the first spouse’s estate. It also doesn’t offer creditor protection. There are other documents in a comprehensive plan that can address these goals. Discuss the issues with an experienced estate planning attorney.
Failing to consider state estate taxes. You may live in one of the states that has state estate taxes. Twelve states and DC impose estate taxes. These include Hawaii, Washington, Massachusetts, Oregon, New York, Minnesota, Illinois, Vermont, Maine, Rhode Island, Connecticut and Maryland. Keep this in mind when reviewing your strategy and make certain to discuss how portability is elected with your estate planning attorney.
Taking advice from family or friends. Make sure the person you discuss your plan with is knowledgeable about the process. Look for an experienced estate planning attorney who knows tax law, trust and probate issues. You may also ask this attorney, if they practice in elder law.
You should have your estate documents in place to give you peace of mind that things are going to happen as you wished upon your death.
If you would like to discuss your legacy options with an estate planning attorney in Jupiter, Palm Beach Gardens, or Naples, Florida, schedule a complimentary call with Edward J. Welch at Welch Law, PLLC. At Welch Law, WE WANT TO DRAFT YOUR LEGACY!
Reference: WMUR (May 6, 2021) “Common estate planning mistakes”