Estate Issues to Avoid

Posted on Mar 02, 2017

Clients often ask about the basics of an estate plan. 

What does that mean?  What is included in the basics?  Why might one client’s estate plan be different than another client’s?  These are just a few of a plethora of questions that should be asked when beginning the estate planning process.  An article from Yahoo News titled “9 Estate Transfer Issues to Avoid” offers a relatable perspective on what the estate planning basics are, what you should be doing and looking for, and proper steps to handling potential tax issues. 

Last Will and Testament

As the article points out, it is imperative that you make sure your will does what you want it to.  If you do not understand your will or if a beneficiary is mistakenly identified, your will is not going providing the service, protection, and peace of mind that it should. 

Estate Tax

Additionally, the article also discusses when the estate tax applies and when it does not.  Planning documents for a person that is in the wealthiest 2% of the population are going to look and function very differently than planning documents for a young couple that has not had enough time to amass a certain amount of assets. 

Inheritance Tax

At the same time, it is necessary to understand the difference between the estate tax and an inheritance tax. The inheritance tax is a tax imposed at the state level.  The article states that, in 2016, six states had inheritance taxes.  Is your state one of them?

Having a conversation with your attorney, your certified financial planner, or both, is an integral part of the estate planning process.  More importantly, those conversations are pivotal pieces to understanding what you are leaving your beneficiaries to deal with once you are gone.  Surrounding yourself with advisors you trust and having open conversations about your estate planning documents and any pertinent tax consequences before you die will allow you – and your beneficiaries – to navigate the ins and outs of even the most basic estate plan. 

Read More About Estate Issues to Avoid...