For many of us, we look forward to retirement as a time when we'll be…
The Costly Pitfalls of Not Hiring an Estate Planning Attorney
An estate planning attorney provides more than simply “preparing documents.” Rather, using their expertise and in-depth understanding of the current laws, an estate planning attorney evaluates your unique situation to create a plan that will ensure your assets are distributed according to your wishes after you pass away while also protecting them for you and your legacy while you are still alive. Not hiring an estate planning attorney can result in the following costly mistakes that can have serious consequences for you and your loved ones.
1. Tax Consequences of Not Hiring an Estate Planning Attorney
An estate planning attorney can help you minimize the tax liability on your estate by taking advantage of certain tax incentives. One such incentive is the step-up in basis for assets held in a revocable trust. When assets are transferred to a revocable trust, the grantor retains control of the assets during their lifetime. However, when the grantor passes away, the assets held in the trust receive a step-up in basis to their fair market value on the date of the grantor’s death. This means that any appreciation in the value of the assets that occurred during the grantor’s lifetime is not subject to capital gains taxes. If you don’t plan your estate properly, you may end up paying more taxes than necessary, which can significantly reduce the amount of money that goes to your beneficiaries.
2. Being Subject to Probate Administration
One of the most important goals of any estate plan is to avoid the costly, time-consuming, and very public process of a probate administration. Without a proper plan in place, your assets will have to go through the probate process in order to distribute your assets after your death. The costs of a probate administration add up quickly, including attorney fees, court costs, and others, which can significantly decrease the legacy being passed on to your heirs. Not only can this be costly for your loved ones, but probate can be a very tedious and time-consuming ordeal, which can have the effect of prolonging their grieving and even creating discord among your beneficiaries.
3. Creating Disputes Among Beneficiaries
Without clear and specific instructions on how to distribute your assets, there is a high likelihood of disputes arising among your beneficiaries. One of the most common sources of disputes is a lack of clarity in the estate planning documents. If the documents are not drafted clearly or contain ambiguous language, beneficiaries may interpret them differently, leading to disagreements and disputes. Another common source of disputes is when beneficiaries feel that their interests have not been adequately represented. For example, if one beneficiary feels that they were unfairly left out of the estate plan or that they did not receive their fair share of the assets, they may contest the will or trust. If there is a history of animosity or tension between family members, or if there are concerns about the intentions of the executor or trustee, this can lead to disputes over the distribution of assets.
4. Failing to Protect Your Assets
An estate planning attorney can help you protect your assets from creditors and potential legal liabilities. Without proper asset protection, your assets may be vulnerable to lawsuits, claims, and other legal issues, resulting in costly expenses and losses. One common threat to assets is litigation. If you are sued, your personal assets may be at risk if they are not properly protected. An estate planning attorney can help you create a plan that separates your personal assets from your business assets, reducing the risk that a lawsuit will affect your personal finances.
Not hiring an estate planning attorney can result in costly mistakes and consequences that can affect your loved ones and your estate. By working with an experienced estate planning attorney, you can create a plan that minimizes taxes, avoids probate, reduces disputes, protects your assets, and ensures that your wishes are carried out. At Pierce Legal, we understand the need to create estate plans that will protect your family’s legacy. Contact us today to establish peace of mind at (330) 588-6115.
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