Estate Planning Mistakes to Avoid In Beloit
Estate planning in Beloit WI is for anyone with at least one thing of value.
Money in a bank account, a car, a home, land or other property of real value are all better off as part of an estate planning effort than not. Estate planning accomplishes two primary things for everyone no matter how large an estate is. Estate Planning is –
- Allows you to maximize the value of the estate you pass on to your heirs and beneficiaries.
- Allows you to make informed decisions on assets and how they should be managed while you are still alive and well.
Each estate planning process is unique. As a result there are no “one size fits all” plans. However, the process used in estate planning helps gather information and create an opportunity to protect assets with certainty, without making personal estate information public.
Estate Planning Mistakes to Avoid For Any Size Estate
No Estate Planning At All
Death is inevitable – and often untimely. Thoughtful planning for what occurs after your death, like ensuring your personal and financial affairs are in order and managed properly, is entirely up to you. Unfortunately, estate planning is commonly overlooked, causing confusion and unneeded expense and stress.
Not Updating A Will
For most people, life has many changes as time passes. The one sure thing is nothing is for sure. Personal changes in families, businesses, births, deaths, divorces, property acquisitions and many other events occur throughout a lifetime. Too often people just forget to update their wills and don’t include the new circumstances of their lives in their wills.
Not Planning For Disability
Estate planning is not only for managing your estate after your death. Unexpected or long term disability can have a huge impact on your personal and financial affairs. Designating who will handle your finances, raise your children, or make healthcare decisions on your behalf are extremely important. It may be necessary to appoint a power of attorney and possibly create a living trust to work on your behalf if you’re unable to do for yourself.
No Gifting To Reduce Estate Taxes
The Internal Revenue Code specifies gifts up to $13,000 a year per spouse may be excluded from estate tax. The result is gifts made to persons, groups or businesses are subject to a $26,000 estate tax savings. Not gifting is a common estate planning mistake. Making gifts under your estate plan to reduce your estate taxes leaves more money in your estate for distribution and positively impacting chosen people or organizations/causes.
Having Children’s Name On Deeds
By putting your child’s name on the deed to your home, you could be giving your child a hefty sized taxable gift. Gifts more than $13,000 per spouse require a gift tax return. In addition, you lose what is called a step up in basis, which could result in more tax for your child. So, no matter how good your intentions may be, by gifting the family home to your child you may end up giving a number of financial headaches. An option is to create an estate plan passing on a home or other assets via an inheritance or in Wisconsin, a transfer on death deed.
Choosing The Wrong Executor
Who is the best choice for executor of your estate? Is it your spouse? Is it your child? Is it someone else who may be better suited to handle your affairs when you are gone? Or, maybe there is someone not as personally invested in your estate. The bottom line is you need an individual to handle the extensive duties and demands required of an executor, trustee or guardian in an objective fashion. Many times the best person is not a spouse, child or someone with emotional ties.
Not Taking Advantage Of The Federal $5.5 Million Exemption
An easy way to save on estate taxes for married couples is to use the federal exemption of $5.5 million per spouse. Even if a spouse dies, rather than losing the deceased spouse’s individual exemption amount, a portion of the estate can be protected under an exemption trust (also known as a credit shelter trust).
Putting Off Estate Panning
Knowing estate planning can benefit you is not enough. Estate planning is something to do before it is too late, such as a death (obviously) or diminished health or mental capacity. To avoid not having a proper estate plan in place, plan on meeting with an estate planning lawyer to help you create an estate planning checklist.
Not Using An Estate Planning Lawyer, Financial or Tax Professional
Not using an estate planning lawyer or other estate planning professionals is probably the most common mistake a person makes. This is especially true if you have complicated assets or if you are uncertain about drafting your own estate plan. An estate planning lawyer can provide you with tax-planning strategies based on the particular needs and demands of your estate, helping you minimize or avoid paying large estate taxes.
An Estate Planning Lawyer Based In Beloit WI
Monahan and Johnson S.C. in Beloit WI has an experienced an estate planning lawyer ready to assist you in navigating the estate planning process.
Monahan and Johnson S.C. offers free initial meetings with an estate lawyer to Beloit and Janesville WI area residents. You will meet one-on-one with an experienced estate planning lawyer.
Call or email Tom Johnson today at 608-362-8086 for more insight about how to proceed with your estate planning lawyer in Beloit WI.