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Commonly Overlooked Issues in Estate Planning

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Most people are concerned with the big picture when planning their estates. For example, they may ask, who should inherit what and how much? Is a living trust completely necessary? Nevertheless, there are several details that are commonly disregarded, but can drastically affect the distribution of an estate plan and any intended beneficiaries. Below are a few of the most frequently disregarded estate planning issues.

Proper Tax Planning: For federal estate tax to apply the estate has to be worth more than $11.4 million for an individual. Even in cases where the estate is exempt from federal estate tax, there are other taxes that must be anticipated in an estate plan. Although California does not have a state inheritance tax, it does not prevent a beneficiary from having to pay inheritance tax in other states. For instance, if a California resident inherits property in New York, then there will be an inheritance tax bill from New York State. Also, the estate may be forced to pay income taxes on any earned investment income before the estate can be settled. These taxes can be paid from any of the estate’s liquid asset accounts.

Liquid Cash: Does your estate have enough cash available to cover the operating costs of the estate until it is completely settled? An estate has to pay for various court costs, attorney’s fees, probate expenses, debts of the decedent, and even the day-to-day living expenses for any surviving spouses as well as other dependents. It is important to estimate the amount of money required and make certain there are enough monetary resources to cover all of the above expenses related to the estate plan.

The Executor’s Access to all Necessary Documents: The executor has to be able to access the decedent’s vital documents in order to uncover assets and take care of all of the decedent’s concerns. Additionally, creditors should be identified and paid in full before the estate is settled. A detailed list of creditors may be needed for the executor to confirm or dispute any claims by creditors. When creating an estate plan, leaving a notebook or detailed guidelines listing all significant assets, their location, identifying details such as registration numbers, passwords or account numbers is necessary. Without the above information, the executor will be forced to spend time and money locating all the estate’s assets. 

Beneficiary Designations: Most of the estate’s assets can easily be transferred from a will or trust, by designating a particular beneficiary to receive the asset. Annuities, vehicles, life insurance policies, IRAs and other retirement accounts can be directly transferred to the beneficiary. In order to make the proper arrangements, a beneficiary designation form must be submitted to the holding institution or business. Make sure to keep the beneficiary designations up-to-date and provide specific instructions to the executor so that he or she knows which assets will be transferred through a beneficiary designation. 

Get Assistance with Your Estate Planning Documents 

It is never too early to create your estate plan. A knowledgeable estate planning lawyer can help you establish a personalized estate plan. The Feldman Law Group can carefully craft a custom-built plan for all your needs. Walnut Creek estate planning attorney Aaron Feldman has been helping individuals and families meet their estate planning needs for over 35 years.

With the right estate planning attorney, the process is much easier. You can count on our qualified team to study your situation, discuss all of your interests and objectives, and work to create a dependable plan. Call today at 925-283-6691 or contact us online to discuss your estate planning options more in-depth.

Resource:

forbes.com/sites/ashleaebeling/2018/11/15/irs-announces-higher-2019-estate-and-gift-tax-limits/#4bb313584295

https://www.feldmanlawgroup.com/modifying-your-living-trust/

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