Top 10 Estate Planning Mistakes… And how to Protect your Family from Them

It’s a terrible tragedy when someone’s lifetime of hard work and success is squandered away in taxes or disputes.  Unfortunately, after 15 years’ work in estate planning, probate, and estate settlement, we’ve found this happens all too often.  Even more unfortunately, this outcome is almost always avoidable by proper planning.
Let Oakstone Law help you protect your family from the top 10 estate planning mistakes.

  1. I don’t think I need a Revocable Trust. Although a Revocable Trust may not be a fit for everybody, it’s a must for most people.  Everyone, whether you’re single, divorced, married or an unmarried couple, has the same three objectives in doing an estate plan – distribution, management and preservation.  Sadly, many people opt to use a Will, Joint Tenancy or beneficiary accounts like PayOn-Death (“POD”), Transfer-On-Death (“TOD”) or In-Trust-For (“ITF”).  These often have unintended consequences, causing problems or financial losses for you and your family.
  2. All Revocable Trusts are the same. True, all Revocable Trusts may be similar; every car has four wheels and an engine, but we’ve all seen some we wouldn’t take our chances in.  Have your Revocable Trust prepared by a Law Firm because if it isn’t, you’re probably asking for trouble right away. (In fact, in many states, it is illegal for anyone other than an attorney or his or her firm to prepare a Revocable Trust.)  Remember that your estate plan protects your lifetime’s assets.
  3. My trustee will be able to step in and handle everything immediately if I’m ill or disabled. That’s what a well drafted Revocable Trust is supposed to do.  However, not only must your Revocable Trust have the proper provisions (that I’ve found many don’t), but your Revocable Trust must also be properly supported by some additional legal documents and tools (that many estate plans also lack).
  4. My family will avoid probate because I have a Revocable Trust. The truth is: All Revocable Trusts do NOT avoid the expenses, delays and publicity of a Court Probate.  Are you surprised?  You’re not the only one.  Some Revocable Trust preparers don’t realize this either, because they haven’t handled Trusts after clients have died.
  5. My beneficiaries can get their inheritance from my Revocable Trust and handle it on their own. Your beneficiaries will receive lots more cash than you have.  You may not consider yourself wealthy because you don’t have a lot of cash, or liquid assets, or because they’re locked up in places like IRAs or retirement plans.  But when you die, everything you own may be turned into cash – your real estate sold, your IRAs and retirement plans withdrawn, your life insurance matured.  Beneficiaries may inherit a much bigger pile of cash than you have now.  That may be a problem.
  6. I have a Revocable Trust, so my IRAs and retirement plans are protected. IRAs and retirement plans are not generally protected by your Revocable Trust.  That’s because they typically pass directly to your spouse or other beneficiaries you name, outside of your Revocable Trust.  The right choice of IRA beneficiary is critical to assure your family’s protection and to achieve proper income tax “stretch-out.”
  7. I’m fully protected because I have a Revocable Trust. A Revocable Trust, because it is “revocable,” affords you no protection against lawsuits, creditors or bankruptcy.  Because you can revoke the trust or withdraw assets at any time, so can a Court if you are found liable.  You may require planning beyond the Revocable Trust if you want the peace of mind of asset protection.
  8. My estate is too small to worry about estate taxes. Regardless of the current size of your estate, you may still be underestimating the potential for Estate Taxes.  The value that counts for estate tax is not the value today, but the value at the date of your death (for most married couples, the date when the second spouse dies).  We can argue whether the Estate Tax exemption will go up or down, but consider these facts… We’ve got the greatest deficits in history.  We’ve yet to pay for three costly wars.  We have a Social Security system starting to fail.  We have a new Healthcare Program to pay for.  Congress may need to raise taxes again in the future – and lower the Estate Tax exemption.
  9. I’ve got a Revocable Trust, so I’m all set. It almost goes without saying that, “The only constant in life is change.”  Laws change, new planning techniques emerge, and your relationships change.  If you haven’t reviewed your Revocable Trust (and other estate planning documents) within the last three years, consult a qualified estate planning attorney as soon as possible.  Our clients are entitled – and reminded– to come in for an Annual Review at no additional cost.  Because what good is a well-drafted estate plan that becomes out-of-date or even obsolete by the time it comes to use it?
  10. I’ll get around to it someday. Hopefully, by now, I’ve already convinced you of the need to set up a proper estate plan (if you don’t have one) or to review the one you have already.  Unfortunately, many people never “get around to it.”  Two-thirds of Americans do not even have a current Will.  BEWARE: Procrastination is the “Silent Killer” of estates.

To learn more and get detailed examples of how to avoid these estate planning mistakes, we’ve put together a free, downloadable e-book titled, “The Top Ten Estate Planning Mistakes… And How to Protect Your Family from Them”.  You don’t need to call, or even come in for a consultation to get it.  All you have to do is click here and download it, absolutely free.

About Oakstone Law, PL

Oakstone Law PL was founded by Bob Kleinknecht. A member of the Florida Family Trust Company Subcommittee, the Estate Tax & Trust Planning (ETTP) Committee and the Real Property, Probate & Trust Law (RPPTL) Section of the Florida Bar, Kleinknecht has 15 years’ experience.

Prior to founding Oakstone law, he spent more than eight years serving as a personal, in-house estate, tax and charitable planning attorney for a Forbes 400 family in New York and Florida. Before that he was an estate planning and estate settlement attorney with prominent firms in Boston and Washington, D.C. after beginning his career with a boutique firm in Naples, Florida.

Licensed in Florida and Massachusetts, Kleinknecht has developed a practice model that eliminates billing by the hour and offers a streamlined, customized client process supported by technology, security and a personal approach.

For more information on Oakstone Law, click here. To get in touch with us, click here to send us an email, or call 239-206-3454. Our office is located at 5137 Castello Drive, Suite 2 in Naples, Florida 34103.

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Oakstone Law
1415 Panther Lane, Suite 439
Naples, Florida 34109
Tel: 239.206.3454