Frequent Estate Planning Mistakes and How to Avoid Them
If you get anything out of the following, it should be that Minnesota estate planning law is much more than writing your will and leaving it sit for decades on end. It’s okay if you only want to write a willor if you don’t want to have to update everything each year. How much estate planning that you do and how often you review it can only be decided by you and yourself. So, in order to help ensure that everything goes smoothly, perhaps consider avoiding at least the mistakes listed in this article.
They can happen to anyone. But if you know how to avoid them and take time to avoid them, you may not be the one making them. And if you don’t want to have to keep checking up on everything, start by not making these mistakes from the beginning.
Forgoing Gifts
While it may be true that you view each of your estate planning ventures as some kind of gift, there’s also the fact that it may be advantageous to make gifts. And not everyone makes these gifts. We’re not talking about making gifts as in sewing new sweaters, but this means making gifts to other people, businesses, or parties in the form of currency
Your own spouse can help you in giving these gifts, helping to increase the overall charity. The thing to watch out for, though, is the amount that can be given by each spouse. You must stay well aware of how much you can give in order to maximize how much estate tax that you can avoid. You read right. Not only can you have more opportunities to give charitably and get your life partner involved in the fun, but you might be able to reduce the amount paid in taxes. This will mean that you actually have to make the gifts in some way, shape, or form, but if your goal is to give it away anyway, this can help reduce estate taxes
Just be mindful that if you want the most savings, you’ll probably need to get your spouse to assist you so your family can give more your estate planning very year because the limit is normally monitored by the year and the individual rather than the lifetime and family.
No Updates
Using an irrevocable trust to give away your assets and letting it sit because you can’t really change it is one thing, but never updating your will is another. Down below you’ll read why it’s important to update titles in specific, and there are still other things to be monitored on top of that.
If you can change something in your estate planning, you should at least consider if it should be changed. That’s not to say that it should be changed back and forth. Nonetheless, you probably want to at least keep track of who your beneficiaries are and where they live, and update everything accordingly.
Think about what kind of shock your beneficiaries will feel if they find out you left all your money to someone who passed on before you did or to someone that they have no idea of their whereabouts.
That probably won’t happen, but you want there to be less issues when they start carrying out your will and trusts even if you’re not bodily there to guide them. Most parts of estate planning, moreover, are centralized on what’s written in the documents rather than what’s said amongst friends and relatives.
Just because you told your family to figure things out when you’re gone doesn’t mean that they’ll be able to change what you wrote in your will twenty years prior.
Mishandling Titles
One mistake to avoid is not handling titles properly. Putting everything in your will may sound like it will resolve everything, but the hard truth is that some parts of your estate may need to be
handled with greater levels of care and detail. Just as an example, listing someone on your bank account may actually mean giving them a gift in the eyes of the tax man rather than simply granting them access to your cash. That said, if you actually want you and your spouse to make early gifts to dodge estate taxes, as was mentioned previously, and do so by adding someone to a bank account, you need to be very careful about how everything is titled.
Please don’t get the wrong idea, however. There are still assets out there that may need you to have the title changed just because you want to give them away. You should check every title when you review your estate planning documents and do so on a regular basis. Laws regarding ownership can change similarly to how estate planning laws can evolve over time. That’s not even touching on the fact that you may want someone to have something in your name and giving it to them means changing the title. Estate planning is not always a static venture.
Not Funding Trusts
After you make a revocable trust, one of the first things you should do is fund it. If you have no intent of actually funding a living trust, you should reconsider if it’s right for your estate planning ventures. It may not be as hard as you think it is. Normally, the stuff that you have lying around your house can be placed into the trust by just doing a bit of writing that says you want it given away to a beneficiary. You can always talk with your lawyer if you’re having trouble coming up with the right wording.
Though, don’t be fooled into thinking that such applies for everything that you want to go into your revocable trust. You may have to change the registration on your truck, for example. Just because you updated your revocable trust doesn’t mean that everything is set in stone. To reiterate that, unless you make sure that your trust is correctly funded, you may as well assume that it means nothing. Maybe someone will get your favorite collection of Hawaiian shirts through this trust, but your vehicles might not be passed down so easily.
Preventing Mistakes | Minnesota Estate Planning Lawyers
Now is a perfect time to look into reviewing your estate planning documents with an estate planning lawyer. Everything might be in order and everything could be just fine. What you can do to be sure, however, is get help from Flanders Law Firm LLC in order to double check everything.
Making a phone call to 612-424-0398 is how you start.
You don’t even need to have your estate plan worked out or even have a will to begin the process. Each part of estate planning should be viewed as a journey forward. Tell yourself that you are moving in the right direction regardless of what happened in the past. You can correct what needs to be corrected.
