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Top Eight Estate Planning Mistakes

Many people would benefit from establishing an estate plan. Avoiding these eight common estate planning mistakes can help make life easier for those who survive you.

Not having an estate plan! 

Any saver or investor at the least needs to have a current will.

Believing that having a will avoids probate. 

A will is basically a document that informs the judge and your loved ones during probate of your wishes after death. It helps with guardianship if you have minor children and it provides a safety net for the intentions you have of your personal belongings and estate.  

Believing that establishing a revocable living trust will reduce estate taxes. 

After you pass away, your trust will have its own tax ID and the trustee must file an annual income tax return on its behalf. You may want to consider a Bypass Trust (AB Trust) to help reduce taxes by leaving some of your property to your children, but allowing your surviving spouse to use it during his/her lifetime.  

Not having your estate updated regularly. 

Many times, when an estate plan is originally drafted to the time of death, many things have changed, from new assets to new family members.

Improper titling of assets. 

Having the wrong beneficiary named on retirement accounts, life insurance policies, and trusts regardless of what your will says, your accounts will override it.

Not having a current durable power of attorney for health care/directive to physicians. 

Without these, your desires may not be understood and are left to interpretation of the parties involved, which may lead to disagreements and lack of continuity between them.

Not having a community property agreement. 

This is of utmost importance to those who live in community property states.

Not funding your living trust properly. 

No matter how thorough your living trust is, it needs to be sufficiently funded. Designating the trust as the legal owner of your property and assets can help avoid probate and possible estate taxes.

Avoid Estate Planning Mistakes with Chatterton & Associates

Thinking about dying is never easy, but planning for the inevitable is necessary, especially if you want it to be as stress-free as possible for the ones you leave behind. Mistakes can potentially be avoided with proper planning and guidance from an estate planning attorney and a qualified financial professional.

This article is for informational purposes only.  This information is not intended to be a substitute for specific individualized tax, legal or investment planning advice as individual situations will vary. For specific advice about your situation, please consult with a lawyer or financial professional. You should discuss any tax or legal matters with the appropriate professional.

© Academy of Preferred Financial Advisors, 2017

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