There are large numbers of mistakes that can be made during estate planning investment. Some of these mistakes are mentioned below:
Mistake No. 1: Not planning to avoid probate
Many people just have a will or nothing at all to direct the disposition of their estate. However, having a will alone cannot avoid the expenses and time delays of the probate process for those with estates greater than $15,000. You can find best Ventura estate planning law firm via web.
The probate process is also public, with family and financial matters becoming public record, including announcements in the local papers. This can attract unsavory attention to a surviving spouse or other family members.
Mistake No. 2: Not planning for the Massachusetts and Federal Estate Taxes.
A trust is an effective way of doubling the amounts that a married couple can pass tax free to their children and grandchildren. While the federal estate tax free amounts continue to change and may drop to $1 million per person in 2011, it is important to consider how the growth of your assets over time will affect your tax situation. The state of Massachusetts also imposes a separate estate tax on all estates over $1 million. Your planning should address both of these taxes, which can be substantial.
Mistake No. 3: Not considering the potential for double taxation on IRAs and other retirement plans.
Taxes on IRAs and other retirement plans can create a 70% tax before your IRAs can reach your children or grandchildren. IRAs and other retirement plans are taxed twice, once as part of your taxable estate, and a second time as they come out of the IRA as income. These taxes together can reduce your IRA by 70% unless you plan effectively.