Errors to Avoid in Estate Planning

November 27 2015


Everyone looks forward to the new year and its promise of new opportunities. Did you know the old year might also yield rewarding opportunities? As you look ahead, consider some year-end decisions that can make a big difference now and in the future.

There are a number of pitfalls to avoid when planning your estate. Poor planning is one of them and can result from a mere omission in assets or failure to plan. Another pitfall can involve making the wrong decisions about how to transfer your assets to the people and organizations that mean the most to you.

Here are 5 errors that could impact your family or your estate:

1. You Don’t Have a Plan

Many people don’t realize they need a plan. As a result they fail to make a will or create a plan during their lifetime. Not having a plan means the distribution of your assets will be dictated by your state’s law. State “intestacy laws” typically leave a percentage of your estate to your family, but you have no say in how your property is divided or who gets what. Make sure you create a plan so that your lifetime intentions are carried out. Click HERE to receive a free guide to planning your will.

2. Using Online DIY for Legal Help

The internet makes it seem easy to prepare a will or trust online, leading some people to feel they do not need to consult an attorney in their planning. However, these DIY plans often fail to take into account the variations in state law. Worse, many of these plans would not hold up legally if there were a change in federal tax law. For these reasons, it is important to use an experienced estate attorney when creating your future plan. We can help connect you with a qualified attorney that can help you reach your goals – contact us for more information.

3. Failure to Properly Designate Beneficiaries

Have you designated the beneficiaries for all of your assets? If so, have you reviewed your designations recently? Most investment accounts allow for the designation of a beneficiary. Because all of these beneficiary designations absolutely control who receives your assets, it’s important to periodically review your designations. Contact us or your attorney if you would like a copy of our bequest language for purposes of designating CFF as a beneficiary of your estate.

4. Failure to Maximize Annual Gifts

Gifting your property during your life is perhaps the oldest and best way to minimize future estate taxes. Many people fail to realize the prudence of making annual exclusion gifts each year to family members. Over the long run, you can transfer significant sums of money out of your estate and reduce your taxes. There are also strategies such as charitable lead trusts that can help you leverage your exemptions and allow you to give even more. To learn more about creative ways to help your family and community while reducing your taxes, contact us.

5. Failure to Take Advantage of the Gift Exemptions

Above and beyond the annual exclusion gift limit, you are permitted to make gifts during your life up to the federal gift exemption amount without owing any gift tax. Making lifetime gifts is a simple and effective way to minimize estate tax. Be sure to act now and take advantage of the current generous gift exemption before it expires. Contact us if you are interested in including Central Florida Foundation in your planning. We can help you create a plan that maximizes your gifts to your family in addition to helping us Build Community by Building Philanthropy.

Contact us for more information about any of these topics. We’re happy to help.

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