Estate Planning Mistakes To Avoid
Commentary
As an attorney and wealth manager, I have reviewed hundreds of estate plans, and I have noticed that the plans often need to be updated to reflect the true intentions of the client. On several occasions I have met with clients who are very concerned about making sure that their assets remain in their bloodline and not to a son-in-law or daughter-in-law.
However, most trusts that I review direct the successor trustee to distribute the assets outright to the grantor's adult children upon the grantor's death.
Once assets are distributed from the trust, the assets are no longer protected from claims of creditors and could potentially become the property of child's former spouse after a marriage ends either by death or divorce. In order to achieve proper bloodline planning, one's assets should remain in trust for the benefit of one's children and not distributed.
Secondly, many parents are worried that their children may mismanage their inheritance. If this is the case, the selection of the successor trustee is critical. It will probably provide insufficient safeguards to name one's children as the trustee if the parents want to prevent the children from misspending. If an adult child serves as their own trustee, the trust will lack sufficient checks and balances.
Sometimes parents will name the most responsible child as the trustee or co-trustee, however this will often cause conflict between siblings who cannot agree on how funds are to be disbursed. Also, what happens if that sibling becomes unwilling or unable to serve as a trustee?
Luckily, there is language that can be added to the trust to avoid these issues. Finally, many people create a trust to avoid probate. However, it is very common for people with trusts to continue to own property titled in their own name. Those assets must be probated unless they are put into one's trust prior to their death.
Janyl Smith is an estate planning attorney licensed to practice in Florida. Janyl is also a financial advisor with Singer Wealth Advisors, Inc. who specializes in wealth accumulation, tax-efficient financial strategies, and retirement income generation. She has 12 years' experience in the financial services industry and holds an advanced tax degree from the University of Miami School of Law.
Singer Wealth Advisors is an SEC registered investment advisory firm. This information is provided for informational purposes only, is general in nature, and is not intended as a recommendation to take any action.
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Singer Wealth Management 1515 S. Federal Highway, #211, Boca Raton, FL 33432
Phone: 561-998-9985
Website: www.singerwealth.com
Email: [email protected]
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