Creating a comprehensive estate plan can be a complex process. It requires forethought, strategic planning and an understanding of tax laws. Below are a few common estate planning mistakes that you want to avoid:
Create a Plan
Don’t assume your estate is too small to warrant having an estate plan. Although state law provides a plan for everyone, it likely is not the most beneficial plan for your loved ones.
Beneficiary Designations & Title to Assets
It is important to verify that your estate plan matches your beneficiary designations and how your assets are titled. If there is a conflict, the designations and the titling will control, but you want to avoid confusion in order to eliminate any disputes from arising.
Life Insurance
If you own life insurance at the time of your death, it can be included in your estate. If you choose to transfer ownership of the policy during your lifetime, you can avoid any potential estate tax inclusion. Deciding how to have your insurance policy owned or controlled is a highly individualized decision, but it is important to get professional advice.
Gifts
An effective way to minimize future estate taxes is by giving annual gifts to your loved ones. You can transfer significant amounts of money or assets out of your estate which reduces your tax liability. With strategic planning, you can use your annual gift tax exclusions so each yearly gift can be leveraged into greater sums being transferred out of your estate. To learn more, please read our blog “Estate Planning Tip: Gifting to Grandchildren.”
To learn more about mistakes commonly made in estate planning, please read our blog tomorrow titled “Estate Planning Mistakes to Avoid – Part 2.” The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about creating a Trust, Will, or estate planning in general, contact The Astill Law Office at 801-438-8698.