William Penn Life, 2017 (52. évfolyam, 1-12. szám)
2017-07-01 / 7. szám
Moneywise with Bob Bisceglia, National Sales Director Avoid these 6 estate planning mistakes TRUSTS HAVE GAINED TRACTION in recent years as one of the best estate planning vehicles in the United States. If you have a trust, you might feel comfortable that it will take care of every estate settlement issue - from helping you and your family avoid probate after your passing, to making the transfer of wealth a very smooth process. While in many cases that is true, it's not always the case More and more, we are seeing a trust being used as a will substitute, but using a trust is not always the same as having a comprehensive estate plan. Here are six common issues that may come up when settling your estate, and some possible ways to avoid them: 1 Not naming the proper fiduciary It's quite common when choosing a trustee or executor to choose a close family member, often a son or daughter. You value their insight after all, don't you? In reality, that assignment can place a real burden on the person or persons. The fiduciary (or beneficiary) is responsible for transferring all of your assets held in your trust or estate. For someone who has accumulated assets—such as real estate, business interests, stocks or bonds—naming someone who is inexperienced in that position could cause a lot of problems. Serving as trustee or executor is a major commitment, and choosing one child over another can cause family conflict. As I mentioned in a previous article, I have seen families literally torn apart over a $500 discrepancy. Alternatively, if you name multiple children, the stress, potential disagreements and complications of settling the estate could strain their relationships with one another. 2 Failing to consider the disposition of tangible personal property Quite often, the little things mean the most to people. Something that you kept in your curio or on your desk for years may not have much value to the average person, but family members may have a special attachment to it. Tangible property is typically handled in a will, even if there is a trust in place. Often, that part of the will is just a clause stating that the property should be divided "as my children agree" versus naming specific bequests. This can (and does) cause conflicts between heirs if two or more beneficiaries want the same item. In worst-case scenarios, this can even involve court and legal intervention, adding even more stress and cost to an already costly, stressful ESTATE PLANNING situation. Most states allow for a "separate writing" part that can be incorporated into your will which allows you to list certain tangible property items—such as jewelry, china, musical instruments, etc.—and assign them to certain beneficiaries. A key "best practice" is to communicate your wishes about who gets what before your passing to help smooth any potential hurt feelings about the distribution of these assets once you are gone. Many feel that an even better practice is to gift the items before you pass; that way, you can see the value of the gift being enjoyed by your loved ones while you're still living. Not accounting for digital assets When you think of your assets, what comes to mind? For most of us, its real estate, investments, personal property, bank accounts, and the I ||ggg| like. But, what about the extensive music collection you purchased through your phone or over the internet, or the airline miles and hotel points you have accumulated over the years? In our area, we have seen court battles over Pittsburgh Steelers or Penguins season tickets and seat licenses! We live in a digital society. Laws are still evolving around these types of assets, so it's important to talk to your heirs and estate planning team members about any concerns you may have about these types of assets. Many times there are heirs, executors or trustees who have no clue about the existence of these assets unless you brought them up as part of the process. Improper titling of assets This is probably the most common of estate plan“ning mistakes. Thankfully, it is being addressed more often with middle to higher net worth individuals. Different assets—such as 401 (k) plans, IRAs and insurance policies—transfer in different ways. As your life changes, and you draft new estate planning documents, it's critical to confirm that assets are titled properly and beneficiary designations are up-to-date. (See Jerry Hauser's articles in the last two issues of William Penn Life to verify the importance of having current beneficiary designations). Make sure your beneficiary designations and improper asset titling do not defeat the goals of your overall plan. Ignoring family discord One of the hardest things to handle is realizing that some members of your family might not get along 4 1 1 r 5 4 0 July 2017 0 WILLIAM PENN LIFE
