Estate Planning: 10 Simple Steps To Avoid Errors


Estate planning has been among the major causes of family wrangles especially in cases where the deceased had assets in varied locations and with more than one dependent. These cases arise due inappropriate planning often due to the confidence in extended health and mainly due to procrastination. Here are some easy steps which will lead to an effective transition of property from one owner to the next especially upon the passing on of the estate owner:

1. Ensure All Documents are Recorded and in Place

Most people leaving behind inheritance cause the associated chaos in inheritance due to their failure to make appropriate plans. If the owner does not write and coordinate a clear will, specify the form of ownership and clarify the beneficiary designations, then this increases the likelihood of chaos among the heirs of the estate. In case the will is not available, even the court finds it hard to settle the case and such scenarios should be avoided at all costs.

2. Maintain a Close Follow up on Beneficiarie’s Designation

This scenario is also common as many people do not bother to confirm regularly the designation of the person destined to inherit the property upon the passing on of the owner. This is mainly due to the fact that such designations will always take priority upon the will on death. It may thus arise that a beneficiary specified in the designations is no longer a valid beneficiary, but as long as this is not updated in such other documents like the insurance covers, then they remain the rightful heirs and this may cause trouble especially for the current rightful heirs.

3. Ensuring Clarity on the Forms of Assets Ownership

Assets held are normally under varied forms of ownership including joint ownership, sole ownership or even may be owned as per a certain state’s laws. This should be checked thoroughly as it may result in conflicts e.g. where all jointly owned property is supposed to be inherited by the partner. Change of ownership at this point may thus differ from the owner’s expectation or from the expectation of other prospective heirs leading to wrangles over the estate. This is because the described transition of ownership in the will is always overridden by the ownership form.

4. Ensure Documents are Accessible to Administrators and Heirs

Most people in the name of safekeeping, end up keeping wills in safes in banks or in private places such that upon passing on, no one has access to these vital documents. This makes all the prior planning irrelevant since it may be hectic to even obtain the documents for a smooth estate ownership transition. Wills in safes in banks can be accessed by the administrators though this may also take time for complete authorization by the probate court.

5. Ensure There are Operational Trust Funds with Access to the Assets

Trust funds provide the easiest asset management and inheritance especially where the beneficiaries are children. Trustees will always act in the best interest of the intended beneficiary ensuring a smooth transition with minimal chaos. The challenge however arises in convincing the asset holders to actually transfer these assets to the trust funds confidently.

6. Take Charge of The Tax Effects

Many people when leaving behind wills do not consider both federal and state taxes. These taxes are levied on estates depending on their worth, and may eat up into the inheritance affecting the inheritors who end up inheriting the tax burden too. This may affect their financial status since the taxes are paid by the inheritor and not out of the estate. Different states will have varied tax rates on inherited property and it is the responsibility of the asset owner to identify the assets distribution especially where the assets are in different states and thus clear the tax burdens involved.

7. Enhance Clarity in The will Where a Rightful Inheritor is not to Get a Specific Asset

This is another major cause of conflict as some beneficiaries may not understand why they are excluded from inheriting some asset e.g. a child may not be enlisting as a probable heir of the parent’s land. The only remedy of this is avoiding appeals challenging the will through a non-contestant clause. This is a statement meant to discourage contesting of the will under any circumstance. Any beneficiary challenging it is supposed to lose any other stake specified as inheritance and thus end up with no inheritance at all. This helps greatly in the smooth transition especially with the disgruntled heirs who will not risk losing everything they would have got.

8. Ensure You Adhere to All State Formalities and Regulations

Most people will tend to ignore the hectic processes of writing wills in preference for easier options. This may however tend to be expensive in the long term especially if the final will do not get approval due to failure to comply with the required formalities. An example would be a will prepared without witnesses or without involving an attorney in the aim of minimizing on costs. This might open up the document to controversy thus hectic transitions.

9. Avoiding Planning Likely to Arouse Disputes

Despite there being documents in place, incompetency in their preparation may lead to disputes during their execution. To avoid such issues, the asset holder may agree to undergo competency tests to verify his ability to write down competent wills. This may be done through actual tests, medical evaluations or interviews. He may also draft a document and forward it to an attorney or trustee for verification before signing it as the official will document, which may not later on be altered.

10. Ensure Enough Liquid Assets are Available

Many people just leave their assets in the most liquid forms, which ends up brewing trouble for the inheritor. This is as a result of the inadequate liquid cash to cater for the inheritance taxes incurred and other final inheritance expenses. Although tax expenses are not paid from the estate’s proceeds, if the heir has inadequate funds in cash then he will have trouble clearing with the tax department in order to take over the estate. It therefore advisable to ensure some liquid form of assets is also available to help them sail through smoothly.

In conclusion, estate planning is among the most important detail on top of availing funds and assets for your next of kin. Failure to plan it all well may lead to fracas and subsequent funds mismanagement and/or family wrangles which would have been easily avoided. The steps above may help ensure a smooth transfer of assets to the rightful beneficiaries and with minimal conflict.

Author Bio:

Robin Fitzpatrick is blogger for Surratt Law. He likes to write on Law, Spousal Support, Various Legal Issues related to Family Law and Guardianship.

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