When it comes to estate planning, there are many misconceptions which are ingrained in the minds of many. This leads to mistakes which can be disastrous when not addressed. It is expected that most people will have little or no insight into the legal aspects of estate planning, and that is why there is need to hire an estate planning attorney to avoid these common mistakes. To have an error-free estate plan, contact the estate planning lawyer 07653.
The following are common mistakes associated with estate planning
1. Failure to review retirement accounts
Most retirement accounts across the country are subject to an RMD (required minimum distribution) once the account owner turns 70 and a half. This is to provide protection benefits for tax, creditor and investments, while encouraging savings. But the problem is that a retirement account can represent a huge chunk of one’s possessions and as such, you have to consider who you want it to go to. One major problem is that wills and trust do not decide where a retirement account goes, but by the beneficiary designation of the account. Sometimes it may be better to leave the account to your spouse; in other cases it is best to share it among family members. These days, the legal system makes it more beneficial to leave retirement accounts to a number of your heirs. You can always discuss this with your estate attorney and obtain professional assistance tailored specifically for your situation.
2. Not taking advantage of gifting
Making gifts to charity and beneficiaries can considerably reduce your estate value, thus reducing or completely avoiding estate taxes. Many people are ignorant of this, and then their surviving family has to pay huge taxes before inheriting property. The estate planning attorney will help you in making charitable gifts through donor-advised funds and charitable remainder trusts.
3. Failing to plan for minors
It is highly important to consider your minors when creating your estate plan. Minors below the age of 18 cannot inherit property. Therefore, if you pass away before they attain that age, they may not be able to enjoy what you desire them to enjoy. Leave funds in a trust for your minors, and appoint a guardian in your estate plan who will manage those assets in the trust for the benefit of your minors until they attain the legal age of 18. People also often fail to write concrete instructions on how these assets should be managed, and so they get abused by the trustee or guardian.
4. Not having liquid assets
If you desire to distribute property among your beneficiaries, then it would be a grave mistake not having liquidity. Also, without liquid funds, your trustee or fiduciary would be unable to manage your business as you had instructed. The need for liquidity heightens when you have a buy-sell agreement for transferring the business into another hand. The buy-sell agreement would dissolve if adequate liquid assets are not found.
5. Not considering guardianship and disability
Unfortunate incidents can happen at any time, rendering one incapacitated. If this happens to you, you’d need someone (a conservator, trustee or other fiduciary) to handle your affairs in your stead. If you do not plan for this, an incompetent or undesirable party may end up managing your business and ruining your finances.
Also, when you fail to appoint a guardian for your minors and death comes, your kids may fall into the wrong hands which you wouldn’t have naturally desired.
6. Not updating your estate plan
After creating an estate plan, there is need to check it occasionally if there’s need for updates, but most people ignore this. Some do not find the time; some think an estate plan is a once for a lifetime document but it really isn’t so. New arrivals in your family or business may require a relative change in your estate plan to accommodate those changes.
How to avoid these mistakes
The surefire way to avoid these mistakes is to consult the professional assistance of an estate planning attorney near you. If you live within New Jersey, contact the estate planning lawyer 07653 (New Jersey). The estate planning lawyer in New Jersey is a compassionate attorney who will look into your estate, family and business, and come up with an estate plan tailored specially for your situation. His aim is to help you avoid making costly mistakes in your estate plan, while offering you the opportunity to protect the best interests of you and your family. So why wait anymore, contact the estate planning attorney, NJ, today.