For all individuals, estate planning is a must. Careful planning allows a person to direct the distribution of his or her assets to any individual or entity in accordance with his or her wishes. Even when your estate is simple, there are several mistakes that may plague your planning. A recent article discusses what not to do when planning your estate.
First and foremost, do not die intestate. To die intestate means to die before you have had the opportunity to create any sort of plan for the distribution of your assets. If you die intestate, the laws of the state in which you died will distribute your assets. Perhaps just as importantly, keep your will updated. Events such as births, deaths, marriage and divorce will often have a profound impact on your estate plan.
Next, pay attention to the impact of specific testamentary gifts. If you are leaving assets such as property, a business, or an investment portfolio to your heirs, and you would like your heirs to take equally, it is important to know the value of the items that you are leaving to them. There may be a large tax liability on a property at death, but another big-ticket item could pass tax-free. This unintentional inequity in inheritance could cause fighting and lawsuits.
For assistance in crafting your estate plan, contact us at (626) 696-3145.
