An estate plan is more than simply a way to transfer assets to heirs after death. While this is part of the story, a well-designed estate plan offers a number of benefits. When you work with the Oakley Law Group, the estate plan we create for you and the people you love will protect your hard-won assets; use the tax laws to utmost advantage so you pay minimal, if any, tax; ensure your children’s inheritance; enable you to pass on your values, goals and work ethic. In short, it will protect you, your family and your legacy. And even if you already have a plan, chances are we can make it significantly better. The fact is, an outdated or inadequate plan is often worse than no plan at all.
It is important to remember that if you don’t have an estate plan, the state of California and the IRS will create one for you. Of course, their plan will not focus on minimizing taxes or looking out for the best interests of your heirs. This is why having your own, thoughtfully designed estate plan is so important.
We can provide you with all of the following estate planning services, or just some of them, depending on your particular situation:
- Traditional estate planning, including wills, revocable trusts, powers of attorney, health care directives
- Advanced estate planning, including:
- dynasty trusts
- irrevocable trusts
- family limited partnerships
- qualified personal residence trusts
- gift programs
- minors’ trusts
- generation-skipping trusts
- tax planning
- Special needs planning
- Probate and trust administration
Common estate planning mistakes
Procrastination. More than 60 percent of Americans over 45 have not created a will. Why? The explanation we hear most often goes something like this: “If I make a will, I’ll die.” Of course, if you don’t make a will, you will also die eventually, but your estate may be in complete disarray.
For the vast majority of individuals and families, having a plan that dictates where your property will go is absolutely essential. A will, trusts, insurance policies, naming beneficiaries: these are just some of the ways you can protect your assets and control how they will be distributed. The time to do it is now, because you can’t predict when you will die or if you might become incapacitated.
Incorrectly titling property. Some people who try to do their own estate plans often add children or other beneficiaries to bank accounts, investment accounts, real estate deeds and other property to try and avoid probate or plan for disability. This can create a number of serious problems. For example, the person who is added may have creditors capable of accessing the property to satisfy debts; the added person can get divorced, allowing the former spouse to claim part of the property; certain tax benefits may be eliminated unnecessarily, creating capital gains taxes, and other tax liabilities, such as gift taxes, may be triggered.
Never updating beneficiary forms or aspects of the plan. Surprisingly enough, many people never look at the forms that designate who receives the money for IRAs, life insurance policies and other important documents after sending them to the institutions where the accounts were set up. This can have dire consequences. For instance, if you get divorced and remarried, but don’t take your ex-wife’s/husband’s name off the IRA beneficiary form, your former spouse and not your widow stands to inherit the money.
Improper management of Life Insurance policies. Life insurance proceeds are generally included in your estate. For many estates, this can mean some 45 percent of your insurance proceeds will go to the IRS. At the Oakley Law Group, we can set up a fairly simple trust, called an Irrevocable Life Insurance Trust, to prevent this from happening.
Failure to use the federal estate exemption twice. If you are married, you and your spouse are each entitled to an estate exemption. However, if you die and leave your entire estate to your surviving spouse, you will lose your personal exemption. In effect, this reduces the overall exemption by half and may needlessly cost your heirs tens of thousands of dollars. We can help you avoid this costly mistake, by creating a joint living trust and putting all or some of your estate into it, a strategy that can save some estates hundreds of thousands of dollars or more.
Not planning for disability. With the costs of nursing home care averaging $6,000 per month in California in 2007 and rising rapidly, paying for such care can be a financial catastrophe. The issue of who will manage your finances should you become incapacitated, and ensure your wishes are carried out, is another important consideration. An effective estate plan can offer solutions to these situations, which are becoming more and more common today with advances in medical care and people living longer than ever before.
Hiring the wrong attorney. It is critical to choose an attorney who is both highly experienced and competent, as well as someone you feel comfortable with. After all, you are not just paying for access to technical expertise, you are paying for sound legal counsel. Your attorney must be someone you like, someone you can confide in and someone who will take the time to get to know you and your particular concerns and goals. An attorney, that is, like Steven Oakley, Founder and Principal of the Oakley Law Group, or one of our other highly trained and skilled attorneys.