There Is No Good Reason to Make These Mistakes

Today I read an excellent article warning CPAs (Certified Public Accountants) of the risks that many of their clients face with regard to estate planning. Even when some form of estate planning has been done, the following mistakes show up repeatedly in clients' estate plans:

(1) "Outdated or Unsigned Estate Planning Documents" (i.e., if they have a plan at all, most clients' plans are either outdated or inadequate, and worse yet, unexecuted)

(2) "Lack of Coordination between the Estate Planning Documents, Titling of Assets and Apportionment of Estate Taxes" (i.e. the house is still in dad's name rather than in the name of the trust resulting in an unnecessary probate proceeding)

(3) "Lack of Understanding That a Transfer of $1 Is a Gift" (i.e., that transfers (typically of real property) for less than the fair market value of the property constitute a gift)

(4) "Life Is a Movie, Not a Snapshot" (i.e., that estate planning should be viewed as a process rather than a one-time transaction)

Unfortunately, I see these mistakes every day as people come in to my office to update their estate plans or ask me to review their plans to ensure that "everything is in good order." The sad part is that for every mistake made that I catch for my clients, I know there are a dozen other estate plans out there with those same mistakes that will only be caught when it's too late to do anything about it.

Such mistakes inevitably result in much higher costs in time, money, and frustration when settling the affairs of a deceased loved one. Reviewing an estate plan on a regular basis and making adjustments where necessary is akin to tuning up your car periodically and rotating the tires regularly so that when you take you family on that long road trip, you don't have a blowout or major mechanical failure with your car when it really counts.

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