Keys to Avoiding Common Estate Planning Mistakes
Five Common Estate Planning Mistakes
 Quick. When you
hear the words estate planning, what mental images do you see? Do you see beautiful, tanned people with incredible wealth, living in enormous mansions, riding in shiny limousines
and boarding private jets bound for exotic destinations? If so, then you are only partially correct. In reality, everyone has an estate worth planning. Some are just more complex than
others. In this article we will review five basic estate blunders common to princes and to paupers alike, from Wall Street to Main Street.
#1 Incapacity Issues
On your 18th birthday you are considered an adult American citizen and you become responsible for your own personal, health care and financial
decisions. Even your parents become strangers to you, in a legal sense, should you become incapacitated. This same legal strangerhood applies, by the way, between spouses.
As a result, every adult American, married or single, should appoint agents through proper Durable Powers Of Attorney to make their personal, health care and financial
decisions in the event of their incapacity. Alternatively, a probate court process involving at least three lawyers may be required to appoint agents to make such decisions for you under the
ongoing supervision of the court. And this can be rather expensive and invasive of your privacy.
#2 Minor Children Matters
Silver and gold aside, if you are blessed with children, then they are your most valuable assets … even if you feel like trading them for S & H Green Stamps at
times. If your minor children were orphaned, who would rear them to adulthood and impart your morals and values to them? In some states, only through a Last Will & Testament can you
appoint the appropriate guardians (e.g., back-up parents) for your minor children. Alternatively, in those states a
probate court process may be required to appoint them. This court process may be
expensive and public, and the court might not appoint the same parties you would have selected.
#3 Death & Taxes
Death is a 100 percent certainty. When it comes to transferring your earthly possessions upon your death, you can either make it easy on your loved ones through
proper estate planning, or you can leave it up to the probate court system by default. Prior planning is the more efficient and effective option. There are a variety of planning methods to
accomplish this transfer. For example, Revocable Living Trusts are commonly used to transfer assets post-mortem, independent of the legal system in many states.
Benjamin Franklin astutely observed that the only two certainties in life are Death & Taxes. It is settled law that no taxpayer should pay more than his or her fair
share in taxes. That said, proper estate planning can save hundreds of thousands of dollars from unnecessary federal estate taxes. If you are married, your estate plan can be arranged to
take full advantage of your available estate tax exemption through a combination Credit Shelter/QTIP Marital Trust.
#4 Inheritance Risks
No one values the worth of a dollar like the person who earned it and paid taxes on it. Careful consideration should be given, therefore, to protecting and
preserving an inheritance from squandering, or simply the many misfortunes of life that your heirs might confront. This can be accomplished through one or more Long-Term Discretionary
Trusts. Properly structured, such trusts can protect and preserve an inheritance for generations to come from squandering, divorces, lawsuits and bankruptcies. Without proper estate
planning, a lifetime of thrift can disappear in a season of conspicuous consumption, or through common personal misfortune.
#5 Procrastination Perils
It’s never easy to face the issues of our own mortality, so many adult Americans keep procrastinating. They lack even a basic will, or they have outdated plans
that no longer meet their needs. As a result, these otherwise responsible adult Americans may leave a legacy of unnecessary pain and conflict for their loved ones.
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