Top 10 Estate Planning Mistakes/Part 2 of 2

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number 102 e1298673425844 Top 10 Estate Planning Mistakes/Part 2 of 26.  Failure to Transfer Ownership of Life Insurance. When the insured owns the life insurance policy, the proceeds are subject to estate tax.  By transferring ownership to an irrevocable life insurance trust, the proceeds are removed from the estate (as long as the insured lives for at least three years following the date of transfer).

7. Failure to Properly Time Retirement Plan Distributions. Taking retirement plan or IRA distributions too soon or too late – or taking too small a distribution – can incur penalty taxes.  A California estate planning , asset protection lawyer can help you with a distribution strategy that maximizes the deferral of income taxes.  You also have the option of naming a charity as beneficiary to avoid income and estate taxes.

8. Failure to Plan for Incapacity or Disability. By executing advance health care directives and powers of attorney, you can plan ahead for the proper management of your assets and health care.

9. Failure to Have Sufficient Liquidity to Pay Estate Taxes. By purchasing life insurance or planning for the sale of some assets, you can prevent forced sales of a business or personal assets in order to satisfy taxes on your estate.

10. Failure to Properly Designate Beneficiaries for IRAs and Financial Accounts. Taking the time to fill out a beneficiary designation form for each of your IRAs and financial accounts – and keeping them updated — will help your heirs save on taxes.

Help is available to you by contacting your Southern California financial planning experts today.


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