Drake Software blog for tax pros, covering tax, IRS news, and more

Estate Planning Mistakes

Eliminating Common Estate Planning Mistakes

Estate planning can be overwhelming, and a little scary.  Many people think they have plenty of time to make provisions to their estate plans. However, there is no science to help determine how long they can wait to put their intentions in writing.  Procrastination is the most common mistake people make when it comes to estate planning.

Another common mistake is the belief they can do it themselves.  And while that’s not completely impossible, it is sometimes difficult for them to see the big picture and examine each possible scenario.

People often fail to include contingencies in their estate planning.  For example, it’s possible to add restrictions to the terms of the estate should there be a divorce or a situation where the named beneficiary passes away at the same time.  They also sometimes miss the fine print, or fail to make sure their documents and beneficiary designations are up-to-date – things that could drastically change the outcome of the estate.

The ever-changing laws make it difficult for the average consumer to completely understand the complexities.   For example, there is a common misconception that trusts are designed solely to protect minors when, in actuality, trusts can protect assets for the entire family.  Moreover, numerous tax issues that could, without being treated in the right manner, cause the beneficiary a lot of grief.

While it may be difficult to remind our clients they are not immortal, we can remind them if they wait too long and fail to make provisions, their state may intervene and make decisions for them.  In addition, we should always let them know that we can help them avoid any blunders that might happen due to tax laws and stipulations.

It is obvious there are many reasons why someone should lean on an accountant with tax knowledge with their estate planning, plus it’s beneficial to be able to offer an additional service.  Building relationships with clients and offering services they need can ensure your business continues to thrive by increasing referrals and revenue.

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