Dwight Eisenhower said, “when preparing for battle, I always found plans useless, but planning indispensable.”
If you can envision it, we can make it happen efficiently with a minimum of delay, tax, and cost. Our goal is for you to control your property while you are alive and well and to transfer what you want, to whom you want, when you want, the way you want, all at the lowest overall cost.
Not understanding how your assets will pass at your death.
Contractual (beneficiary designations)
Right of survivorship
small estate probate
Planning around specific assets
Not minimizing estate taxes
A/B trust planning
FLPs and other allowed valuation discount techniques
Advanced techniques to separate the right to income from ownership of the asset
Life Insurance mistakes (failure to use ILIT)
Woes of Joint Tenancy
Avoids only one (1) probate
Lost control over the asset (survivor may not distribute the property in accordance with your intentions)
Incurs an immediate gift tax liability
May lose step-up in basis
May need to litigate against creditor of joint tenant to establish and retain title to your own property
“Botched” attempts could have unintended consequences (importance of “right of survivorship” language)
Creates unintended heirs
Sloppy drafting that looks good but fails to accomplish your intentions
Common with trusts purchased from non-lawyers. May look very professional or even been drafted by an attorney, but unless the attorney discussed your intentions in sufficient details, the plan probably relies on “boilerplate” in an inappropriate manner that may be disastrous.
The documents should be nearly free, it is the counseling that is valuable – i.e., the difference between cheap versus inexpensive.
Assuming your trust plan works
Do you know what your plan actually says
Not realizing that with or without a Will and with or without a trust, you will need professional guidance and incur most of the same expenses. With a trust, you may avoid a probate, but you will still have all the other expenses associated with transferring titles and seeking professional help, legal advice, tax returns – final return for decedent, income tax return for the estate for each year that it remains open, estate tax return if necessary.
That disinherited child
Does your plan provide for after born child or other descendants
Are your beneficiary designations up to date and are the contingent beneficiaries correctly described.
Relying on beneficiary designations
Unless current, the default provision may not be your personal choice.
Trying to do it yourself
You can fill out the forms, but can you fill out the form correctly, and how do you know the difference?
Not considering who pays the estate tax
The incidence of taxation may not fall evenly on all assets and may have disastrous consequences if not properly described.
Not understanding income tax consequences
IRA assets will be taxed as distributed
Gifting appreciated assets
Donee loses opportunity for step up in basis
Giving the wrong gift to charity
Better to donate appreciated property at FMV without paying capital gains (rather than sell property and then contribute cash, or merely contributing cash)
Missing disclaimer deadlines or failing to meet all requirements
Must be done within 9 months after date of death
Disclaimant must not exercise control or accept a benefit
Must give proper notice
Using Uniform Gift to Minor Accounts
Minors will take entire account with no accountability at age 18 or 21 depending on the nature of the gift
Property left to minors
Property must be held in trust without specific guidelines