The Damaging Effects of an Overly Complicated Estate Plan

As the holidays begin and our social calendars fill up, it can be tempting to push back tasks on our to-do list until after the calendar flips. Many people make New Year’s resolutions out of goals they have, including losing weight, getting organized, or moving their education or career along.

Similarly, it’s easy to put off estate planning. People know they need an estate plan, but cite a lack of available time or discomfort when imagining what will happen after a loss. Without a plan in place, the family is left with both emotional and financial turmoil, which can leave behind lasting relational damage between your loved ones. Just like eating healthier can help you avoid a heart attack, putting together a solid plan before you are gone alleviates the situation.

The emotional aspect of crafting an estate plan can seem daunting, but the best way to make the process easier on your family and yourself is to keep your estate plan simple. An ideal arrangement is one not influenced by outside pressures that put stress on each detail.

Avoiding Extra Costs and Stresses

Over planning can present cost burdens that are both unnecessary and avoidable. For example, if your home is transferred to an irrevocable trust while you are in long-term care, when you sell the house you might miss out on the $250,000 in tax-free dollars available from the primary residence home sale exclusion.

Even worse than losing money to fees resulting from over complication is causing strife between family members due to the setup of your estate plan. Structures that tie heirs together in complicated trusts will inevitably create friction. Having your financial advisor help you make these decisions will ensure your strategy is as simple as it should be, easing the stress on your heirs.

One of the most common concerns relating to estate planning is the portion of your estate that goes to the government. In general, you can succeed in minimizing the amount you must legally pay according to current tax laws without introducing any complicated elements to achieve that goal. Sound estate planning will ensure you avoid paying excess taxes.

An Eye to the Future

Just like eating right and exercising now is the best way to have a healthy future, thinking through the structure of your estate plan now is the best way to set your loved ones up for an unencumbered and stress-free financial future. Starting the process allows you and your advisors the necessary time and emotional space to weigh the relevant opinions, values, goals, and relationships in your life.

Make this year the year you stop putting off the important issue of estate planning and take action before the pressures start piling up. Enter the New Year with the comfort and confidence of knowing that whatever comes your way, your estate is in order.

Estate Planning You Can Trust: Cohen & Burnett

Cohen & Burnett has provided estate planning and administration, asset protection planning, and trustee and executor services in Washington, D.C. for over 25 years. To explore your options with our trusted legal professionals, visit our homepage or contact us today.



Receive the latest trends, news and resources on estate planning and asset management directly to your inbox.