Estate Planning Mistakes to Avoid

Here a few costly mistakes people tend to make when preparing their estate plans:

1. Procrastination.  Waiting for a terminal diagnosis before starting the planning process often leaves clients insufficient time to implement effective strategies for tax saving and asset protection.  Attorneys should urge their clients to make planning a priority.
2. Too many amendments.  If a client wants to make additional changes to a trust that already has one or two amendments, it’s best to prepare an amended and restated trust revoking the original trust and amendments.
3. Improperly tying assets to a trust.  “Failure to transfer assets to a trust or their inadvertent removal as upon a refinance often results in an asset being outside the trust at the death of a Settlor and either a probate or a Heggstad petition is required, each of which is more often costly.”
4. Failing to prepare a prenuptial.  Clients with an existing joint estate plan with their divorced spouse need to prepare a prenuptial agreement that is coordinated with a new estate plan.
5. Failing to consider citizenship.  If a spouse is not a U.S. citizen, a qualified domestic trust is a good option. 

See Beth Cohn, Lori Murphy, Timothy Smallsreed, Jim Tramonte, Leticia Vega, & Alyssa Razook Wan, 5 Estate Planning Mistakes You Should Try to Avoid, JDSupra, Feb. 7, 2014.  

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.