Planning for your death may sound counterintuitive, yet doing so can result in long-term benefits for your loved ones and the continuance of your estate. Citizens of all career paths and income amounts can invest their time and energy into planning their trusts and estates to properly provide for the family and take care of any unfinished financial tasks in the process. While estate planning is a productive and supportive process, it’s important to remember that the world of estate law is full of provisions, restrictions, and reactive processes. This complex legal process can be expertly navigated when you work with a dedicated team of Bethesda estate planning attorneys. JDKatz was founded in 2000 to provide the best tax advice, legal guidance, and litigation services to our clients. We’re proud to be among the best estate lawyers in Maryland, and we’re ready to show you how our team’s professional approach is here to optimize your outcome.
Estate planning can be an intensive task, and one that needs to be executed perfectly to avoid frustrating costs and setbacks down the road. Today, we’ll continue to highlight a few of the most common mistakes people make when taking on their own estate plan. Read about a few of there daily errors before reaching out to our estate lawyers for assistance.
Failure in Funding
Setting up your trust is one thing, yet funding and growing it into a substantial amount is a whole other process. Our tax and estate professionals recommend everyone of adult age get their own estate plan to cover their matters and reduce the burden on their loved ones in case of death. Being able to pay your debts and tax responsibilities is important, and building up the value of your trust will help to cover any unexpected costs.
Misinformation on Generational Taxes
Many individuals put forth the effort to ensure that their grandchildren and great-grandchildren are cared for in case they pass away. Loving grandparents who leave substantial estates that skip a generation can be taxed a heavy amount. Our modern standard dictates that gifts and transfers in trust that benefit a skipped generation or unrelated individual that is 37.5 years younger or more can result in a generation tax in addition to federal estate taxes. The exemption limit is now set to $5.49 million, which is a very high number, yet the sum can vastly shrink beyond this. Being taxed 40 percent on estate taxes and 40 percent on a generation tax for amounts over this figure may cause serious issues for those who did not plan ahead.
Not Updating the Estate Plan
Keeping up with all of your documents and ensuring that everything lines up seamlessly is an essential part of any estate planning process. Small changes in your life can result in big updates for your plan. Professionals recommend reviewing and updating your estate plan every three to five years to ensure continuity in the care of your estate. This update is helpful in keeping multiple aspects of your plan clear and ready including:
- Healthcare agents (or attorneys)
Life changes, which is why a proper estate plan works to eliminate any concerns relating to human nature, as why fluidly adapt to changes over the years. Different changes, such as marital status or property ownership, can result in major changes in how your plan needs to be executed. Many individuals fail to take aging into account for their plans, including concerns with mobility and disability. In these cases, it’s essential to designate an individual to protect your trust. Our estate planning attorneys in Bethesda can help in keeping your estate plan comprehensively up to date.
Not Designating a Qualified Trustee
One big aspect of your estate plan that can have far-reaching consequences on your loved ones is the designation of a quality trustee. In many cases, individuals will simply choose their eldest child to take on the challenge of running your affairs after you pass away or are unable to continue to make decisions. A normal estate will take anywhere between a few months and two years to take care of. As a fiduciary, your trustee will have the highest responsibility. Remember to choose this individual based on their qualifications and ability to execute actions exactly per instructions on a regular basis. A proper estate plan will also provide safeguards in case your trustee isn’t up to the task.
Taking on Estate Planning Alone
Many people like to procrastinate serious tasks, such as writing a will or starting an estate plan. This is human nature, and putting off your planning can result in costly setbacks that may place your family in financial danger as opposed to helping them cope in the even of your passing. Investing in professional estate planning experts can provide leaps and bounds of results in comparison to doing it yourself. This process is very complex, often requiring specialized skills from experts in the industry. Minor mistakes now can result in big challenges later, so be sure to invest in peace of mind with an estate law professional.
Don’t go it alone! For nearly 20 years, JDKatz has worked to be your trusted team of estate lawyers in Maryland. Our focus on creating a personalized approach for your needs helps us to better serve residents of Bethesda, Washington, D.C., and the surrounding areas. Contact us today to see how professional estate planning can help you create the best outcome for your loved ones.