Last week we wrote a blog post about some estate planning mistakes that could cost your family money. Today we are going to continue the spirit of that blog by discussing additional mistakes that could be detrimental to you and your family. There are a number of potential estate planning mistakes that can cause minor or more serious problems. This is why you should always take the time to speak to an estate planning attorney if you want to craft a plan of your own. Until then, here are several more mistakes surrounding the estate planning process that could cost you and your family money.
Mistakes That Could Cost Your Family Money: Not Considering What Your Family Will do With Their Inheritances
A lot of people set about the estate planning process with the intention of leaving as much money as possible as inheritances. Also, many people plan on distributing these inheritances as single lump sum payments. But this isn’t always the best idea. Often a lump sum payment can be counterproductive and not as beneficial as more structured payments.
For example, if you have adult children or grandchildren who are in their early 20s, they might be more impulsive and less well suited to receive large inheritances than someone who is older. For them, providing periodic payments through a structured trust is often a better option than simply leaving behind a lump sum payment.
Mistakes That Could Cost Your Family Money: Ignoring Estate Taxes
Another significant concern surrounding estate planning is the issue of estate taxes. While neither Kansas nor Oklahoma imposes a state-level estate tax, and neither has state or federal inheritance taxes that apply in state, there is a federal-level estate tax that could deplete the amount of funds you have to distribute as inheritances.
Determining if the estate tax is something you need to plan for is something you and your attorney should do together. If it looks as if your estate might be subject to estate tax, there are a variety of strategies you can use to help reduce the total tax bill.
Mistakes That Could Cost Your Family Money: Forgetting About Your Plan
Creating an estate plan is one of the best things you can do for yourself and your family. Not only will a plan help protect your financial future, but it will also ensure that your wishes will be honored regardless of what the future holds.
But you should never look at your estate plan as something set in stone. All plans can and usually should change over time to meet your needs as you and your family go through natural changes.
- Founding Attorney, Larry Parman, Shares a Personal and Insightful Message about the Coronavirus Situation and How the Firm is Handling It (click on the video below) - March 27, 2020
- Understanding Estate Planning – Developing a Fair Inheritance Plan - March 26, 2020
- Use Trust Protectors for Added Protection and Flexibility - March 25, 2020