Avoiding these seven most common mistakes can help make life easier for those who survive you.
- Not having an estate plan! Any saver or investor at the least needs to have a current will.
- Believing that having a will avoids probate. A will is basically a document that informs the judge and your loved ones during probate of your wishes after death. It helps with guardianship if you have minor children and it provides a safety net for the intentions you have of your personal belongings and estate.
- Believing that establishing a revocable living trust will reduce estate taxes. After you pass away, your trust will have its own tax ID and the trustee must file an annual income tax return on its behalf. You may want to consider a Bypass Trust (AB Trust) to help reduce taxes by leaving some of your property to your children, but allowing your surviving spouse to use it during his/her lifetime.
- Not having your estate updated regularly. Many times, when an estate plan is originally drafted to the time of death, many things have changed, from new assets to new family members.
- Improper titling of assets. Having the wrong beneficiary named on retirement accounts, life insurance policies, and trusts regardless of what your will says, your accounts will override it.
- Not having a current durable power of attorney for health care/directive to physicians. Without these, your desires may not be understood and are left to interpretation of the parties involved, which may lead to disagreements and lack of continuity between them.
- Not funding your living trust properly. No matter how thorough your living trust is, it needs to be sufficiently funded. Designating the trust as the legal owner of your property and assets can help avoid probate and possible estate taxes.
Julia Carlson is a Registered Principal with, and securities are offered through, LPL Financial. Member FINRA/SIPC.
Information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
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