Estate planning is something many people put off until they retire or it becomes imperative due to a terminal illness or incapacity. In many cases, people end up putting off planning for what turns out to be forever. Even when people do plan, they fail to fully realize that an estate plan that is carefully crafted and managed is a strategy for how you will leave your property to your heirs, minimize your tax obligations, and take care of your medical and financial interests if you become unable to do so and provide for your children, grandchildren and others.
Denver Estate Planning Lawyer Tips
Having an estate planning lawyer advise and draft a plan for you can give you peace of mind, knowing that your assets will be passed to whomever you designate and whose advice can help you avoid the chaos that sometimes occurs when a person dies without any estate plan or has one that is inadequate, outdated or fails to follow the decedent’s intent. When drafting an estate plan, here are 6 estate planning mistakes you need to avoid:
- Waiting too long. If you become incapacitated by age, illness or injury, there is nothing worse than having your heirs squabble over your assets and having the court appoint someone whom you may not know or trust to make important decisions about your medical care and financial interests. It is never too early to meet with a Denver estate planning lawyer to begin to map out to avoid probate, craft a will, draft a trust, and name reputable people to handle your affairs when you no longer are capable.
- What? I have an estate plan? Did you forget that 15 years ago, you began the process of setting up an estate plan? You did the right thing in having a will drawn up or a trust established, but surely circumstances have changed. You now have 3 children, one of whom is disabled, a different wife, a vacation residence and stocks. You may also have diabetes or a heart condition. What this means is that you have to update your will, make sure your real property is titled to the trust, and that your special needs child has a trust set up so that public benefits are not jeopardized if you simply leave funds to him through your Will or life insurance.
- Not accounting for the estate tax. Your estate is not taxed unless it is valued at $5.43 million, or $10.86 million for a married couple. More and more people have estates at this level so it is imperative that you have your estate appraised and if it at this amount and growing, consider gifting as well as other methods of reducing your estate’s value. For instance, you can gift to your heirs and friends up to $14,000 each year (as of 2015). Married couples can gift $26,000 per year per person with the funds coming from one partner’s property.
- Not letting your family and friends know. Can you imagine the surprise a friend will have when he learns that you designated her to take care of your minor children after your death in a car accident? Or, that certain items of jewelry a sister thought she would inherit go to your grandchild or some unrelated? Let your heirs and friends know what items you wish to pass to them now so that any disagreements can be aired while you still have control. If a friend does not wish to care for your children, then you can name someone else who will take on that responsibility.
- Not funding the trust you established. This happens more often than you think. Setting up a trust is great, but now you have to transfer property to it or fund it. Your house and other real estate and any other valuable property can be transferred to the trust so you can avoid probate and the time and cost involved.
- Not having an attorney draft your estate plan. Your estate planning attorney can do more than just draft your will, set up various trusts and advise you on other trust instruments. Getting sound advice on instructions to be included in an advanced health directive, having a pour-over provision in your will or counseling you on how to properly fund and administer a trust can save you and your heirs headaches, expenses, taxes and needless litigation.
Dan McKenzie is a Denver estate planning attorney who has drawn up numerous estate plans for his clients and has been named a “Rising Star” by Super Lawyers Magazine. Everyone has a different plan for passing on their hard earned assets and for taking care of the ones they love. Entrust your affairs and how your heirs and friends will benefit by arranging a meeting with Dan McKenzie today.