One of the most common mistakes people make in estate planning is that they finally create a complete, thorough, highly advantageous estate plan – and then forget to follow through and put it all into effect. It’s not uncommon for people to have detailed documents drawn up, and then not get around to signing them. Or they create a trust, but forget to transfer assets in order to fund it. Or they decide whom to name

Bernard and Jeanne Adler donated $50,000 to an animal shelter in their hometown of Princeton, N.J. The gift was to finance a new structure for large dogs and older cats (whose prospects for adoption are limited), and the structure was to be named for the Adlers. Before construction began, however, the shelter merged with another organization. After the merger, the new organization announced plans to build a smaller structure in another town, without specific facilities for

Some people never get around to writing a will or planning their estate until the last minute, when they have grown old and have a serious illness. Other people write a simple will when they’re young, but never review or update it until something happens that makes them think that death is imminent. While any estate planning is better than none, the vast majority of mistakes and problems occur when people procrastinate planning their estate and

If you don’t need all the money in an IRA after you retire, there can be big tax advantages in carefully leaving it to your children or other heirs. If it’s done right, the heirs can take out only the minimum required distribution each year, and the assets in the IRA can continue to grow tax-deferred for decades – and in some cases, for generations to come. The problem with this planning technique is that it

For decades, it was very common for trusts to be set up like this: “The trust income will go to the first beneficiary, and when the first beneficiary dies, the trust assets will go to a second beneficiary.” Here are some common examples: A couple sets up a trust with the income going to a child, and when the child dies, the assets go to their grandchildren. A wife’s will creates a trust that pays income

If you have a whole-life or universal-life insurance policy that you don’t need, you might want to consider donating it to charity rather than cashing it in. There are two ways to make such a donation, each of which has its advantages: (1) Name the charity as the policy’s beneficiary. The key advantage to this method is that you retain control of the policy. Thus, you can always change your mind if you decide that your

Andrew Reitz set up a trust to benefit his sons, with an independent trustee. The trust document said that if there was a dispute between his sons and the trustee, it would be decided by a private arbitrator rather than a court. When John Reitz, one of the sons, became unhappy with the trustee, he sued to have the trustee removed. The trustee argued that the suit should be thrown out of court, and decided by

One of the most important things people can do after a divorce is to update their beneficiary designations, and indicate who should get the assets in various accounts if they should unexpectedly pass away. Most married people name their spouse as the beneficiary of their accounts, but in the stress following a divorce, they often forget to update these designations. And even when people make an effort, they might not remember every account. Pensions, 401(k) plans,

A year ago, Congress dramatically raised the federal estate tax exemption, which for 2013 was $5.25 million (or $10.5 million for a married couple). And that caused some people to mistakenly believe that they no longer need to think about estate planning if their assets are less than $5 or $10 million. However, nothing could be further from the truth. And people who don’t keep their estate plan up-to-date are making a big mistake that could

IRAs can be an important part of estate planning, especially for savvy investors and business owners. But be careful – mixing your IRA and your business interests too closely can cause big tax problems. The IRS can “revoke” an IRA, and deny you all its tax benefits, if you use the funds for certain improper purposes. This rule applies not only to you, but also to actions by your family members and any business or trust