Mistake #1: Relying on Arkansas’ estate plan. If you do not set up an estate plan, upon your death your property will be distributed according to the laws of your last state of residence. Often, the law will require the probate judge to give your property to someone other than the person(s) you would have chosen.
Mistake #2: Relying on a Will. If your estate plan consists only of a Will, your heirs may face many costly problems, such as probate and/or conservatorship proceedings. True, a Will is the most common estate planning tool, but it may not be the best tool to use.
Mistake #3: Relying on Joint Tenancy. Almost everybody owns their bank accounts in Joint Tenancy. Yet Joint Tenancy often causes families horrible legal nightmares. You have many options that are better and safer than owning property in Joint Tenancy, and they come with much less risk.
Mistake #4: Relying on Community Property laws. Relying on the Community Property laws is a position many clients take. However, as in Joint Tenancy, your property will still have to go through probate on the death of the spouse. Also, as in Joint Tenancy, Community Property ownership requires a conservatorship if a spouse is incapacitated and the home needs a mortgage, home equity line, or to be sold. Relying on the Community Property laws is not a good estate plan.
Mistake #5: Relying on Guardianships. These Court-supervised proceedings for addressing your physical or mental incapacity are costly, time-consuming and horribly burdensome. When you set up a Living Trust and transfer your assets into it, you avoid the need for a guardianship. You also need to put into place up to date Powers of Attorney, Health Care Powers of Attorney and Directives to Physicians.
Mistake #6: Relying on the small estate affidavit procedure as your way of avoiding probate. Most people assume they have fewer assets than they actually have. The small estate exemption that avoids probate is permitted only for estates consisting of less than $100,000 of personal property excluding debt and not debts are allowed.
Mistake #7: Relying on a gifting program as your way of avoiding probate. The law allows you to give away your property at a rate of $14,000 per person per year. A married couple can give $28,000 per year to anyone they choose without gift tax consequences. While this is an effective way to reduce the size of your estate, it has two downsides:
First, you lose control of the assets you have given away.
Second, minor beneficiaries get total control over everything that has been given to them when they turn 21, if the gift is to a uniform transfer to minors act account (UTMA Account).
To avoid that problem certain Trusts would need to be established to receive gifts to minors.
Mistake #8: Relying on the Courts to take care of your child’s finances. If you die intestate (with no Will) or with only a Will, and your property passes to your minor child, the Court will put your child’s money into a Court-supervised guardianship involving annual accountings to the Court.
Naturally, this requires CPAs to prepare accountings, lawyers to file those accountings with the Court, plus filing fees. In addition, since the (State) probate code imposes the most conservative investment standards, this might significantly lower the return on your child’s investment. It also means that the Court determines the person who will serve as guardian of the property, who may not be the person you would have chosen.
Mistake #9: Relying on a form kit for your Will or Living Trust. One size does not fit all because no two people or families are alike. Do you know even one family whose concerns are the same as yours? From your family’s needs and dynamics — to personalities and values — can you imagine any form kit ever being suitable for any family? If you use a form kit, you’re asking for problems. The only estate plan you can rely on is one that is custom prepared by a qualified estate planning lawyer.
Mistake #10: Relying on an attorney who uses boiler-plate Living Trust documents to provide for your spouse and children. When you create your Living Trust, you and your lawyer have the opportunity to write specific instructions about how you want to provide for your surviving spouse and children. If you overlook this opportunity, your family will receive whatever care the one-size-fits-all form documents provide. That care is almost never as good as the care you would want your family to receive.
Mistake #11: Relying on the wrong attorney. Most attorneys know very little about estate planning. What’s more, even estate planning attorneys often don’t put much time or energy into a Minor’s Trust. Responsible parents realize a Minor’s Trust is the most important part of their family estate plan. That’s why I urge you to choose an estate planning attorney who has the primary focus, mission and purpose to help you achieve your family’s estate planning goals: putting your children first.
from Protecting You And Your Family http://ift.tt/29u0uKN
from DeWitt Law Firm, PLLC
