Challenges Of Creating An Estate Plan
Posted On: Monday, July 11, 2022
While almost everyone understands the value and importance of estate planning, few people appreciate the challenges they might have to overcome while planning their estates. Rakatansky, Rakatansky & Associates provides knowledgeable estate, trust, tax, and succession planning to businesses, individuals, and families throughout New England. We work together with our clients to understand their objectives and family dynamics, create a customized estate plan and put that plan into action.
Here Are Some of The Top 10 Challenges You Might Face When Planning Your Estate
#1. Procrastinating Estate Planning – Failing to pursue estate planning is one of the leading challenges many people face. Disability or death makes estate planning expensive, complicated, or even impossible. Unfortunately, in the event of disability or death, the failure to plan catches up with you and/or your beneficiaries.
#2. Family Conflict – At the core of estate planning is your desire to show love and care to your family. However, your choice of trustee and/or executor can make family members not chosen feel the opposite. Choosing trustees or executors is a hurdle when carrying out estate planning. Nonetheless, you should aim to help your family avoid conflict or, at the very least, resolve any dispute that arises.
#3. Tax Planning – The challenge of estate planning in relation to tax planning arises from the different and conflicting tax systems that apply to your various assets. For instance, there is a conflict between loss of basis when it comes to capital gains and gift planning (where you give assets) for purposes of sheltering appreciation by removing the assets from your estate. The complex issues of taxes should be handled with care, lest it costs you a lot of money.
#4. Probate – It’s never a pleasant experience to have the court supervise the administration of your estate. While the court personnel can be helpful, there are other inconveniences you have to contend with. For instance, the lack of privacy on family matters, the filing fees, and the long waiting periods, even when things go well.
#5. Not Accounting For Asset Protection – Many people neglect to protect their assets with estate planning. Creating trusts for your children or spouse and including suitable provisions can protect your assets from predators and creditors. For instance, you can protect the assets you pass down to your children from divorce using a trust.
#6. Successor Fiduciaries – Not including a backup trustee or executor is another challenge. If the named trustees and executors are not in a position to carry out their mandate, the heirs involved might be forced to go to the courts. As such, it’s essential to provide beneficiaries with a means of filling the vacant role.
#7. Lawyer’s Fees – Legal fees are another challenge to estate planning and the execution of the plan. The best way to deal with legal fees is to pay them as you plan your estate. If you do not incur legal fees while alive, it might increase the total fees incurred later on, especially in the case of a legal feud among family members.
#8. Updating Beneficiary Designations – When you purchase and set up your retirement accounts and life insurance, you’re required to establish the beneficiary. In most cases, these are the small boxes at the end of the application form. You should ensure the beneficiary designation is up to date. There are numerous cases where the beneficiary remains a former husband or wife, even after a divorce and second marriage.
#9. Contingent Beneficiaries – If your immediate family members pass away, you should choose contingent of alternative beneficiaries such as distant family members, friends, or even charities.
#10. Joint Accounts – Many people use joint accounts for convenience and as an alternative to wills. A common mistake some people make is to leave money in a joint account with one child in the hope that they will distribute the funds to their siblings. The funds held in the joint account are passed on to the survivor. As such, you should ensure the use of a joint account fits within your estate plans and how you want to divide assets among your heirs.
Protect What You Have Earned
Our estate planning services will allow you to protect and manage your assets for yourself and your heirs. At Rakatansky, Rakatansky & Associates, we work with our clients to help them bring to life their short and long-term goals. We make estate plans to protect our clients’ assets from future creditors, lawsuits, and incapacity. Crucially, our clients still retain control over their assets.
Our team consists of CPAs, a CFP™, a CSA and an attorney who have considerable experience providing a wide variety of trust & estate planning services to clients. Let us help you safeguard your legacy so you can rest assured the maximum amount of your assets will be preserved and distributed as you intended.
Our Trust and Estate Services Include:
- Estate administration
- Estate planning
- Estate tax return preparation
- Legal services
- Succession planning
- Trust administration
- Trust planning
- Trust tax return preparation
Reach out to us today at 508-872-0101 or use our contact form to get in touch.