Estate Planning Mistake #3: Ignoring Taxes
One thing to be aware of in particular, especially if you intend to move in the future, is whether or not you’ve taken estate taxes and state taxes into your consideration. The federal estate tax exemption is relatively high but many people who are purchasing a second home or moving to another location for their retirement don’t really evaluate whether or not state level taxes are required. Some state exemptions could be as low as $1 million, subjecting your entire estate to significant tax payments.
Estate Planning Mistake #4: Leaving Everything Immediately to Your Spouse
You might assume that it’s best to leave everything to your spouse outright and allow that individual to take care of your children but this could be a major mistake if your spouse remarries because the new partner for your spouse can take a much larger portion of your assets, leaving your children with much less. Setting up a trust is one way to circumvent and avoid this problem.
Many people have the misconception that trusts are simply too complicated and that their existence requires a trustee who serves outside the family. People who draft a trust can have the main beneficiary as the sole trustee. This means that your spouse could control the trust but you can name your children as beneficiaries in the event that your spouse passes away. The only extra expense associated with this would require filing a separate tax return on the trust’s behalf.
If you know you’re making one of these mistakes and want to take action to correct it, call a Pasadena estate planning lawyer today.
