What is Proper Estate Planning?
Proper estate planning allows you to plan for your future and that of your loved ones without giving up control of your affairs. Your estate plan should also address and plan for the possibility of your own disability. Your estate plan should help you save every tax dollar, professional fee, and court cost that is legally possible to save. That usually involves avoiding probate.
Probate has been described by some as paying lawyers to sue yourself so the court will pay your creditors first, giving whatever may be left over to your loudest heir(s).
The Problems with Traditional Estate Planning
Below, we'll address conventional estate planning tools and their various disadvantages. Used conventionally, these tools contradict our definition of proper estate planning.
The Pitfalls of Relying Wills to Accomplish Your Estate Planning Goals
• Wills guarantee probate, which can generate executor and attorney fees and cause time delay before your loved ones receive their inheritance.
• Wills are fully public. They are open to inspection by anyone who wants to know about you and your affairs.
• Wills offer no planning or direction for you or your family in the event of your disability.
• Wills are easily challenged by unhappy relatives and creditors.
• Wills usually don't control life insurance proceeds, retirement benefits, or jointly owned property.
• Wills are often bare-bones form documents written in hard-to-understand language. They don't capture the hopes, fears, dreams, values, and ambitions of their makers.
• Wills may not be effective when their makers move to or own property in another state.
The Pitfalls of Relying on Jointly Owned Property to Accomplish Your Estate Planning Goals
• Your joint tenancy property may pass to unintended heirs.
• Joint tenancy does not avoid probate. It only delays it.
• There may be unintended gift and estate taxes if joint tenancy is used between non-spouses or with children.
• Joint tenancy makes no provisions for estate tax planning.
• Joint tenancy does not allow you to give your property to who you want, the way you want, and when you want.
The Pitfalls of Relying on Beneficiary Designations to Accomplish Your Estate Planning Goals.
• Designating beneficiaries on a standard business form, 'beneficiary designation,' often means losing control of a major portion of your estate. It does not enable you to leave instructions or provide guidance to your loved ones.
• Oftentimes the wrong beneficiary is named in the beneficiary designation.
• A beneficiary designation won't protect your spouse and children from unscrupulous people.
• Equal distributions from a beneficiary designation may cause unequal results that won't meet your family's special needs.
• Beneficiary designations make no provision for federal tax planning and may penalize your beneficiaries by unnecessarily forcing them into a higher tax bracket.
Proper Estate Planning
A well designed estate plan makes use of various planning methods selected for their specific benefits, while planning for and addressing their shortcomings. That means the custom estate plan that the estate planning attorneys at The Law Collaborative design for you and your family may include a will, a revocable living trust, healthcare planning documents, and other tools specifically selected and custom tailored to fit your circumstances and help you meet your goals.
To speak with an experienced estate planning attorney about your specific estate planning needs, email us or call us toll free at (818)348-6700.