In almost all new client situations that we review, we find certain things that should be corrected. The following list identifies some of the mistakes:
Wills are out of date and refer to estate tax exemptions that have changed. The estate tax law has changed dramatically in the past ten years, and many older wills have clauses in them which no longer fully protect against estate taxes as completely as they could.
Assets are not coordinated with the Wills. If all a couple’s assets are titled as joint tenants with right of survivorship, the credit shelter formula provisions described on this site will not be able to operate properly, and usually unnecessary estate taxes will have to be paid one day.
Failure to take advantage of annual exclusion gifts to lower estate taxes. Just as accumulating wealth typically involves compounding money over time, so does a lot of estate planning. Small annual gifts to the right kinds of trusts can dramatically lower estate taxes, and properly designed trusts allow the assets to be available to one’s spouse, should the assets later be needed.
Failure to coordinate IRA and Pension accounts. These are often client’s largest assets, aside from their homes, and how those funds will be distributed upon one’s death needs to be thought through in conjunction with the increased exemption from estate taxes.
Waiting until a serious medical condition arises before seeing an estate planner. To take full advantage of many of the common techniques, estate plans need time and years for them to work the best.