Top 10 Estate Planning Mistakes/Part 1 of 2

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number 10 e1298673216337 Top 10 Estate Planning Mistakes/Part 1 of 21. Failure to Diminish Estate Taxes Through Gifts. The annual gift tax exemption is $13,000 for individuals and $26,000 for a married couple.  For those in an estate tax bracket of 45 percent, each $13,000 gift saves $5,850 in estate tax.  In addition, you can make unlimited tuition or medical gifts as long as they are paid directly to the institution.

2. Failure to Protect the Inheritance of a Child. By leaving an inheritance outright to a child, you do not protect the inheritance from estate tax, creditors or divorce.  Leaving assets in a trust, with a third party and the child being named co-trustees, can best protect inheritances.

3. Failure to Utilize Complex Estate Planning Tools. A California estate planning ,asset protection attorney can inform you about estate tax reduction and asset protection techniques like charitable trusts, family limited partnerships, qualified personal residence trusts and selling assets to children.

4. Failure to Include Your Business In Your Estate Plan. A common problem business owners face is how to provide equally for their children, whether they are involved in the business or not.  Using common estate planning tools like life insurance to cover estate taxes and provide a distribution for children not involved in the business can save the family firm.

5. Failure to Use the $5 Million GST Exemption. Putting your $5 million generation skipping tax exemption ($10 million for a married couple) assets in trust for the benefit of your children during their lives, and then to grandchildren, will protect those assets from estate taxes at each child’s death.

Get started by contacting our Orange County asset protection estate planning law firm as soon as possible.

 

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