During this week’s Town Hall Forum for caregivers, attorney Heidi Klippel talked about some common mistakes people make while alive that negatively impact their heirs after they pass.
1. Parents owning real property in common with their children. Your children should inherit your real property through a will or trust, not own it in common whiile you are alive. If they inherit it, they will receive a “step up basis” on the property value if they inherit it, so they pay nothing in capital gains. However, if they own the property in common, they will realize a capital gain depending on the appreciation value and how the title was held.
2. Parents of minor children. You should have an estate plan to ensure guardians have been selected in case parents die unexpectedly and to avoid probate so the children do not inherit everything as soon as they turn 18.
3. Blended families. Makes sure you and your spouse have a will to ensure stepchildren are acknowledged to avoid disinheritance. Also, a surviving spouse can revoke a will upon your deaht, so a trust is preferable for maximum protection.
4. People with $100,000 or more in assets. If your net value is $100,000 or more and you do not have a trust, your assets will go through the costly process of probate and your loved ones will lose substantial money in court costs and attorney fees.
5. People with a trust who fail to title their assets. A trust is only as valuable as the assets titled in the name of the trust. To avoid probate, title all of your assets into the name of your trust and update your beneficiary designations on your life insurance, annuities and tax deferred accounts.
If you are interested in learning more about estate planning, consider signing up for a special event we’re hosting from 6 to 7:30 p.m. on Wednesday, July 11 at our Corporate Offices. The session will be led by Scott Stewart, J.D., of the Elder Care Law Firm.