I recently ran across this Forbes.com article on “7 Major Erros in Estate Planning.” The article has a no nonsense list of mistakes that I see and discuss on a daily basis as a Grand Rapids, Michigan wills and trusts attorney. I think the article’s intro paragraph makes a point that should not be overlooked. I’ll rephrase it as, “you would be surprised how many families work hard to provide for themselves and their children, yet ‘cheap out’ on the estate planning that will carry on there legacy.”
The 7 major mistakes the article lists are:
- Not Having a Plan
- Online or DIY rather than professionals
- Failure to Review Beneficiary Designations and Titling of Assets
- Failure to Consider the Estate and Gift Tax Consequences of Life Insurance
- Not Maximizing annual gifts
- Failure to Take Advantage of the Estate Tax Exemption in 2012
- Leaving assets outright to Adult Children
The article gives a brief, helpful explanation of each of the mistakes – you should go read it. I’m happy to see that the article points out that even in situations many families may think are “basic,” a plan cannot be overemphasized. As the article states, “Even a simple plan that is well thought out and results from the identification of your personal objectives will be much more successful than nothing at all.”
One of the few faults I find in the article is that the main focus seems to be on money and taxes, rather than the who we are as people and how we want to leave a legacy for our family. I think the closest the article comes is this very accurate statement: “As in most estate planning, it is very much dependent on individual circumstances: family dynamics, net worth, financial / liquidity position, personal preferences and, even, your philosophy on the transfer of assets to future generations.” I think the articles frequent focus on “high net worth” or “wealthy individuals” is misplaced, as “regular” families like you and me can benefit from almost all of the points discussed in the article.
So, what do you think? Have you made any of the mistakes mentioned in the article? Can you think of additional common mistakes?
Michael Lichterman is an estate planning and charitable planning attorney who helps families and business owners create a lasting legacy by planning for their Whole Family Wealth™. This goes beyond merely planning for “stuff” – it’s about who your are and what’s important to you. He focuses on estate, charitable, and asset protection planning for all generations (“young” and “experienced”), the “sandwich generation” (caring for parents and children), doctors/physicians, nurses, lawyers, dentists, professionals with minor children, family owned businesses, and pet planning. He enjoys creating life long relationships with his clients centered on their families values, insights, stories and experiences.
IMPORTANT: Michael is licensed to practice law in the State of Michigan and has offices in Kent County. I am ethically required to state that the above information does not create an attorney/client relationship. These posts should be considered general legal education and are intended to provide general information the topic discussed. Frequently, differing facts about the particular individual or family, if known, could significantly change the recommendations made in the blog post. Information provided on this site should not be used as a substitute for competent legal advice from a licensed attorney that practices in the subject area in your state. The law changes frequently and varies from state to state.