How To Prevent Taxes From Diminishing Your Estate

Individuals put great effort into developing and maintaining their estates. For many, the ultimate aim is to provide ongoing financial security for one's spouse, children and other loved ones. Yet matters do not always proceed as they should. Insufficient estate planning can lead to unnecessary tax liabilities, rancorous fighting among beneficiaries and other concerns that drastically devalue the worth of one's legacy.

For more than 60 years, the attorneys at Wiener and Wiener LLP have helped individuals in Allentown and West Palm Beach with their estate planning needs. We understand what it takes to protect your holdings and to ensure that your wishes are met. Equally crucial, we guide our clients around the most common procedural pitfalls that can compromise an estate.

Common Estate Planning Mistakes

Over the years, our lawyers have come to recognize the most frequent mistakes individuals make when planning their estate. These include:

  • Failing to update a will — Having a 20-year-old will can be worse than not having a will at all. Indeed, such documents may fail to account for the recent births of children, may designate prized assets to be left to inappropriate heirs — an ex-spouse, for instance — or may name incapacitated or deceased individuals as personal representatives. With this in mind, you should review your will at least once a year and review it with an attorney at least once every five years.
  • Failing to coordinate the estate plan properly — Your will controls the distribution of property that is titled in your name — your house, for example, or your car — and which doesn't have a beneficiary designation. But many assets are not controlled by your will. These include retirement accounts, 401k plans and life insurance policies, all of which automatically carry a beneficiary designation. As such, it is necessary to regularly review all of your beneficiary designations to make sure your holdings will be dispersed as you wish. Equally important is understanding how estate taxes or inheritance taxes will be made, and coming up with a plan for paying them, so that the ultimate distribution of your funds will match your intended desires.
  • Failing to write it down — Wills are only effective when written and signed. Simply telling a child or spouse of your wishes has no legal effect. It is necessary that your will be in writing, properly signed and that your heirs know where the original is located. This last point — that the original draft must be found — is crucial. Often we are contacted by heirs who have opened an envelope which they thought was an original will only to find it is a copy. The original document is what must be filed with the Register of Wills in Pennsylvania or the Clerk of the Circuit Court in Florida after your death.
  • Failing to account for the unexpected — Our firm strongly recommends that clients have a durable general power of attorney prepared. This is a document that vests a trusted individual with the management of your property and assets in the event that you become incapacitated or otherwise unable to handle financial affairs. Likewise, it is important to establish a separate health care power of attorney document (also known as a living will) to set forth your desires for medical treatment in case you become incapacitated.

Providing For Your Beneficiaries

If you would like to discuss your estate, reach out to our firm. You can reach us in Pennsylvania or Florida at 800-563-8276. You can also arrange a consultation online.