If you already have an estate plan, you might want to review it to ensure that it does not contain any of the following mistakes. If you haven’t made an estate plan yet, keep these tips in mind when you do.
- Do not put personal items in a Will. If you want to avoid probate you will not want items like jewelry or family heirlooms in your Will. Although these things are often distributed before the Will can be read, your estate will be managed by court proceedings if there are disagreements. It is better to fund a Living Trust with these items instead.
- Be careful with the language in your Will when it comes to personal belongings. It is not a good idea to state that your personal belongings should be divided equally because it is difficult to determine a cash value and decide what is equal. Instead, appoint a Trustee or representative to decide who gets what if there is a dispute.
- Don’t leave taxable assets directly to your spouse; this can cause havoc with taxes, especially if there is no safeguard against this in your estate plan. It is better to leave assets to your spouse in a Marital Trust. A Marital Trust can protect your spouse against your creditors, and if your spouse remarries it will keep these assets safe in case of divorce. Another advantage is that if your spouse does remarry and then dies, those assets will go to your children, not to the new spouse.
- An unfunded Revocable Trust can also be a major problem with an estate plan. It is important to remember that any assets you have that are not funded to your Trust will go into probate; this is especially true with out-of-state real estate. Before a Trust will do you any good at all, it will need to be funded, so take the time to do this after you have created the Trust.
Estate planning is a complex process, and it is easy to make major mistakes. It is both useful and important to seek the services of an experienced estate planning attorney who can guide you through the process so that you have a solid estate plan to protect yourself and your loved ones.
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- Leaving Assets Can Be Tricky – Part 3 - August 13, 2020