You may not think you have an estate to worry about because you don’t have to pay estate taxes. But, good estate planning does not let the tail wag the dog by focusing on taxes. Instead, your estate plan should focus on your family and what is important to you. Take a look at this recent article by Elizabeth Wine in “On Wall Street” – 10 Biggest Estate Planning Mistakes

All parents hope to pass their values onto their children; and of the many values they hope to pass on religion and spirituality often tops the list. In some cases, religious values are so important to a parent that they will even include mention of these values in their estate plan. Our firm strongly believes that an estate plan is not just about money, but about leaving a legacy, and we often encourage our clients to include mention of their values—religious or otherwise.

Formalizing a legacy of values is not always as easy as leaving a financial legacy, however; and as this recent article in the Wall Street Journal mentions, there is a limit to how far a parent or grandparent can go in dictating religious values to their heirs. The article points out that “being too restrictive in an estate plan in an effort to pass on religious values—say, disinheriting children who marry outside the faith—can create divisions within a family and spark extended, costly legal battles, all while failing to have any impact on the heirs’ beliefs.”

One of the most common value-imposing strategies used by parents in estate planning is to require that children marry within a certain faith in order to receive their inheritance. This strategy has worked in some instances, for example, “in a 2009 case that was closely watched by estate planners, the Illinois Supreme Court—overturning the decisions of lower courts—unanimously ruled that a Jewish man, Max Feinberg, and his wife, Erla, could legally cut off their grandchildren who chose to marry outside of the Jewish religion.”

This strategy is often hurtful, however, and quite frequently expensively controversial, causing some heirs to challenge the will or trust; a process which can take many years and thousands of dollars to resolve. It is often better to explore other options as far as passing on values. “One increasingly common alternative to strict provisions that may penalize certain heirs is to leave money for children and grandchildren in a trust and give the trustee discretion to make distributions based on broader criteria that you set out when creating the trust… That way you provide guidance on how you would like your money to be distributed, but you leave some leeway for the trustee to consider special circumstances that you may not have anticipated and to weigh the consequences of each decision on distributions.”

A trusted and sensitive estate planner can talk to you about what is important to you and your family, and help you choose the best and most respectful way to pass on your wealth and your values.

In a world where bureaucracy and taxation become more present and complex every year, it has become absolutely necessary for every family to have an estate plan. Not all estate plans are created equal, however, and it takes a little bit of research—or a conversation with the right advisors—to determine which plan will be the best fit for your family.

A recent article in Forbes may not be able to tell you which of the many estate planning options will work best for your family, but it does list some of the major errors in estate planning to look out for and avoid; and in light of what you just read in the paragraph above, number one on the list is not having a plan at all.

If you’re reading this you probably already know on some level how important an estate plan is, so it’s the remaining six errors you’ll want to consider most carefully; these include common mistakes such as #2, using online or DIY programs rather than professionals to create your plan, the problem with which is that “estate planning documents should represent the culmination of a well thought out financial and estate plan. An amalgam of stand-alone documents does not a plan make. Furthermore, those pesky nuanced requirements (i.e. the “formalities”) for a validly written and executed document will vary from state to state. Internet sites can provide you with documents but no actual advice that fits you in the context of your specific financial and personal life.”

The error listed as #7, leaving assets to children outright rather than in trust, is another mistake commonly made by those who my not yet understand just how useful a well-thought-out estate plan can be. As the article points out, the problem with leaving assets to children outright is that those assets are just as likely to end up in the hands of creditors or ex-spouses as in the hands of your children or designated heirs. The right trust can give your heirs complete access to their inheritance while providing protection from divorce or debt.

The important point to take away from this article is that an estate plan is not something to be hastily created, checked off the list, and tucked away to collect dust and be forgotten. An estate plan can serve as a roadmap for your family, serving as a reminder of values, as a guide for your children, and as a shield against loss and attrition.

Imagine this: You’re retired, your only significant asset is your home, you’re very close to your child or children, and you don’t want the cost of creating an estate plan. In such cases, what’s the harm of simply putting your home in the name of your child to avoid probate and then be done with it?

We’ve gotten this question more than once at our office, and we almost always advise against it. There are a number of reasons to keep your home in your own name, and this article in the Huffington Post points out two of the biggies: Property taxes and your child’s liabilities.

These aren’t the only reasons to keep your home in your own name, however. Other reasons include:

* Your relationship with your child may not be as great as you think it is. Once the home is in their name they have no obligation to continue to let you live in it one, two or ten years down the line.

* You have more than one child. Putting your home in one child’s name can cause a rift of bad feelings between siblings. The alternative, of putting the home in the names of all your children, only makes it more vulnerable to liabilities and paperwork errors.

* There are other, safer ways to avoid probate. One of those ways is with a Revocable Living Trust. A Revocable Living Trust is flexible and reliable, and doesn’t have to be expensive. In fact, a Revocable Living Trust can actually end up saving your family money in the long run.

Don’t make a mistake that could end up causing you to lose your home. Contact our office to discuss how we can help you protect your family and your assets from probate and liabilities.

Most people know that they should execute some kind of estate plan eventually, but don’t think that they actually need one right now. On our blog we spend a lot of time telling people that they do need an estate plan, and that they need one right now—or as soon as possible! But it’s not always easy for a layperson to know for sure if and when the time is right. Answering the following questions will help you determine when your family may need an estate plan, and if now is the time to take action.

Do you own a house?

Owning your own home means you have at least one significant asset, which affects your need for planning in a number of ways: First, a piece of property cannot be split between people, it will have to be sold (which can take months or even years) and the proceeds divided among your heirs—often at a loss, especially if the house was undervalued to sell quickly. Second, many people who feel they have “small estates and won’t have to worry about Probate or the estate tax” are surprised when they find that the value of their home does indeed push their estate over the line. Third, if you are married you may need to make provisions for your spouse if you would like them to be able to continue to live in your home.

Do you have minor children?

If you have minor children and have not made provisions for them in case of your death or incapacity the government will be in charge of their futures. This could mean your children are put in the care of foster parents or become wards of the state. That is not a chance you want to take.

Do you want your heirs to receive their inheritance immediately and in full, instead of having to wait months (or years) before receiving what may be only a percentage of what you left them?

Probate is a long and expensive process. Without a plan in place your assets will have to be probated before they can be distributed. Not only does this often take years, but the probate fees (which can be considerable) are taken out of your estate—leaving less for your heirs.

Do you know how you want to spend your final moments?

Most people don’t die quickly and quietly at the ripe old age of 98. Most people fall victim to accidents, illness or dementia—unable to make their own health care decisions. Without a healthcare directive or living will that specifically outlines your wishes and instructions for your health care and nominating an agent to carry out those wishes, you could end up in a Terri Schiavo situation—costing your loved ones both financially and emotionally.

If you answered yes to any of these questions then NOW is the time to get started on your estate plan. You may need something small and simple, or you may need a plan that is more comprehensive. Not all plans are created equal, and our office can help you design the one that will be the right fit for your individual family needs. Contact us today.