11 MOST COMMON

ESTATE PLANNING MISTAKES

AND

HOW TO AVOID THEM

Ronald C. Morton, J.D., LL. M., CELA

First, the good news

By reading this document, you're already in the right direction. Far too many people fail to create estate
plans. Usually, this is due to two reasons: 1) they're too lazy, or 2) they don't like to think about death.
You've taken a great rst step to avoiding the disastrous consequences of not having a plan. This alone
shows you're thinking ahead. You want to provide for your loved ones after you're gone, and leave a lasting,
positive legacy.

Now, the bad news

If you're like most people, you'll fail to take action after reading this crucial report. Or, you'll make several
estate planning mistakes because you didn't seek the expertise of a competent attorney.
As a result of those missteps:
Loved ones will get into disputes about who owns what
There will be mass confusion about your will (or lack thereof)
Family members won't be able to locate important documents
Estate taxes, probate, court fees and potential litigation will be extremely costly
Assets may be completely lost or mishandled, instead of being distributed to your heirs
Don't let this happen to you and your family.
Take a look at the 11 most common estate planning mistakes below. Then, get started on your own
error-free estate plan immediately with the help of an experienced estate planning professional.

About The Author

Ronald C. Morton, LL.M., CELA, is the founding member of the
Morton Law Firm, PLLC. His statewide practice is focused on estate
planning, asset protection planning, elder law, business planning, and
Medicaid planning. Mr. Morton graduated cum laude from Mississippi
College in 1988 with a double major in public administration and
applied sociology. In 1992 he earned a Juris Doctorate degree, magna
cum laude, from Mississippi College School of Law. He was awarded a
Masters of Law in Taxation with Honors from the University of
Alabama School of Law in 2007, and has earned the designation of
Certied Elder Law Attorney by the National Elder Law Foundation.

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1) Procrastinating
The single biggest mistake people make is NOT having an estate plan at all.
They put it off. They assume they have more time. Or, they simply don't feel
like doing it. And before they know it, it's too late.
None of us is immortal. No matter what your current age, it's critical that
you start thinking about estate planning today.
Every day that you put it off, you increase the risk of your assets being
wrongly distributed, lost and disputed by courts, lawyers and even your loved ones.
Make no mistake: if you don't create an estate plan to decide what happens after you die, your state will
decide for you at a huge nancial and emotional cost to your heirs.

2) Relying on your state to gure it out.

Some people reading this will think, "Big deal. I trust the state will do what's best for my loved ones."
Most of the time, this is not true.
If you die without a will, then laws will dictate what happens to your assets. In this case, family lineage will
take precedence over what you or your descendants would have preferred.
Imagine some of the possible scenarios:
Some of your closest family members may not receive anything at all.
Some may receive more than you would have wished.
Arguments between loved ones could build into bitter legal disputes.
Some of your assets may not even be accounted for and thus never distributed.
If your spouse remarries, but predeceases her new spouse, then your own children could be
effectively disinherited.
Never assume that judges and lawyers will gure it out.
More often than not, nothing goes as the deceased would have planned.

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3) Letting your will collect dust.

Having an outdated will or trust can be as disastrous as not having one at all.
Things change: people, living situations, relationships and laws. Your needs as well as your loved ones'
will probably be much different in a few years than they are today.
This is why it's important to carefully review your estate plan every few years.
Example:
If you left assets to someone who is already deceased, then the courts will decide who should get
those assets instead. Chances are you would not agreed with whatever they decide.
If you have young children, your will should identify who should raise them when you're gone. But
what if that guardian is a completely different and undependable person 10 years from now? If you
haven't updated your will, you'll have no control over it and neither will your kids.
Starting a will is just a rst step. You must review it regularly to ensure all your directions are still relevant
and up to date.

4) Not planning for disability.

Haven't an estate plan isn't just about planning what happens after you die. A good plan also dictates
what should happen if you become disabled, physically or mentally.
If you are suddenly unable to make decisions for yourself, then
these decisions will need to be made for you. But who?
Who should decide what happens to your nances?
Who becomes responsible for managing your estate?
Who raises your children?
Who will make important decisions for your healthcare?
If you don't consider these questions when working on your
estate plan, then you're making a big mistake.
Consider appointing a power of attorney and/or trustee to make these decisions if you're unable to
do it yourself.

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5) Putting children's names on the deed to your home.

It's a generous thought but also a big mistake.
By putting your child's name on the deed, you could be creating an unnecessary nancial burden for yourself
and your child.
Your home, in this case, becomes like one giant taxable gift. Someone has to pay those taxes and if you
were to die suddenly, your child could be left with the bill.
If you want your child to benet from owning your home, there's a much smarter way to do this: pass the
house (or the value of it) onto your child via an inheritance as part of your estate plan.
In most cases, this allows you and your child to avoid paying taxes on it.

6) Forgetting to update beneciary forms.

It's quick, easy and free. And, not doing it could result in a huge portion of your wealth going to
someone who's no longer in your life.
This is why it's so important to review and update the beneciary forms on nancial accounts, including:
Retirement accounts
Insurance policies
When you die, the funds in these accounts don't ow
through your trust or will. This can be scary when you
consider that some people have more money tied up
in retirement investments than in actual liquid assets.
Instead, the beneciary forms dictate who gets the
money even if you lled out those forms decades ago,
before a divorce or kids.
Checking your beneciary designations generally
takes just minutes. Why not do it right now?

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7) Not making gifts to reduce your estate tax.

The estate state tax rate in the United States is a staggering 40%. While it only impacts a relatively
small portion of the U.S. population, it is a massive nancial loss for those who must pay the tax.
If you predict your estate will be subject to the tax when you die, then you should do whatever you can do
limit those losses while you're alive.
One effective way to do this is by making gifts under your estate plan.
Under current Internal Revenue Code, gifts up to $13,000 a year, per spouse, may be exempted
from the estate tax. That means you and your spouse together can get a $26,000 estate tax savings
for each person you give to. You can give to individuals, groups, businesses or nonprots.
Keep in mind, you can also give away more than$5 million during your lifetime, exempt from estate
taxes and separate from the yearly gift tax savings.
Taking advantage of these tax savings will ultimately leave more money in your estate for distribution,
while positively impacting the people and causes you care about.

8) Giving too much to your kids too soon.

The most obvious question you need to ask when creating your estate plan is: "How much do we give
to the kids?"
But there's another critical question you need to consider: when?
At what age will your children be responsible enough to
handle their inheritances? Often, the stock answer is
"when they turn 18." But even though they're technically
adults at that age, do most 18-year-olds have a solid
understanding of smart nancial planning? Did you
when you were 18?
Even at age 21 or 25, most people have barely begun
to consider nancial decisions that will impact them
for the rest of their lives.
This is why it may be smarter to delay larger portions of
your kids' inheritances until they're older. You can also
give the trustee more discretion in distributing those
funds sooner, if they're needed.

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9) Choosing the wrong trustee.

Your trustee is the person or organization that will manage the affairs of your estate after your death.
It's a tremendous responsibility and thus a decision you need to make very carefully.
Clearly, you need to choose someone you can trust. But that doesn't
mean your siblings or adult children are the best picks, though they
may seem like the obvious choice.
Keep in mind that your trustee could be put in an uncomfortable
position when they are closely related to the inheritors. They need
to carry out your wishes and those wishes may not sit well with
every person in your family. Suddenly, your trustee looks like the
bad guy, laying down the law and trying to settle disputes about the
distributions.
For these reasons and others, you may want to consider a third-party,
corporate trustee. It comes at a cost, but is well worth it to most
families that want to have peace of mind.

10) Assuming you don't own enough assets.

You don't have to be wealthy to see the critical importance of having an estate plan.
Everyone should have one. And the stakes are even higher if you are married and have kids. Without one,
you are leaving everything you own at the discretion of the courts.
The reasons for having an estate plan couldn't be simpler.
It gives you complete control of what happens to everything you own when you die or become
incapacitated.
It allows you to give what you have to whom you want, the way you want, when you want.
It enables you to distribute and give away your assets with the least amount of tax obligations and
expenses possible.
Your estate planning decisions or lack thereof will have a major impact on the people in your life.
Even if you feel you don't own much, you owe your loved ones the respect of looking out for them and
considering their needs for when you're gone.

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11) Doing it yourself.

Creating an estate plan can be simple and stress-free but it's not a weekend DIY project.
For the estate plan to be benecial to your loved ones, you need to have an extensive understanding of how
to structure the plan, draft your will, consider tax implications and comply with federal and state laws.
Always use an estate planning professional.
An experienced attorney can help you with every aspect of your estate plan to ensure it's legally sound and
covers all bases. They can help you minimize your exposure to taxes and expenses, and maximize the amount
in your estate to be distributed to loved ones.

Take the next step.

I hope this guide helps you avoid some of the most common estate planning mistakes.
Remember that procrastination is one of the biggest setbacks. Take the next step today by speaking with
an experienced estate planning attorney that can help you create the best-possible plan for you and your
family.
I will assist you in creating an estate plan that protects your family and assets, and provides peace
of mind.

Professional help is a click away!

This publication has been prepared for the general information of clients
and friends of the rm. It is not intended to provide legal advice with respect
to any specic matter. Under rules applicable to the professional conduct of
attorneys in various jurisdictions, it may be considered advertising material.