9 Mistakes You Can Avoid: Economic Recovery Plan

As part of our Economic Recovery Plan, we are focusing on things you can do now to get your personal economic house in order. This article is on estate planning. Yes, estate planning is important for everyone, not just the rich.

Estate taxes are only one small reason to get your estate in order. The main reason is to ensure you give what you want... to whom you want... with as little interference and costs as possible. Estate tax rates have come down while the amount exempted from taxes has gone up. This has caused many to ignore their estate needs. But, in 2011, estate taxes are scheduled to increase again. Unless Congress makes changes, estate taxes will begin at $1,000,000 in value and the rate will jump back to 50%.

Failure to Have a Will
A will allows you to direct who will inherit your assets. It also names guardians for your minor children. If you fail to have a will, then your States' laws will govern what happens. It is either you or the State. Who do you trust?

Failure to Update Your Will
Some states will nullify a will if it was made prior to a life changing event such as a marriage, divorce, or moving to another state. As time passes and your situation changes, make sure that your wishes are reflected in your will.

Beneficiaries of Life Insurance, IRAs, 401ks, etc.
Do you know who is listed as your beneficiary on all of the above? You can easily leave assets to someone you no longer wish to give them to. If your will says one thing and your beneficiary is someone else, the beneficiary will receive the assets. So review all your beneficiary designations periodically.

Owning Everything Jointly With Your Spouse
While it is common for couples to own assets "jointly with rights of survivorship", it does not always make sense. If you have a large estate, it could be a costly mistake. In this day of mixed families, you may unintentionally disinherit heirs. Talk to your advisor to insure you are on the right track.

Leaving Everything to Your Spouse
If your estate is large enough, this may cost you substantial estate taxes. A relatively simple estate plan can potentially save thousands of dollars in estate taxes.

Naming the Wrong Executor and/or Trustee
Executors are called upon to collect assets, pay debts and distribute assets. Your trustee must enforce all the provisions of any trust that you have created. Make sure that those individuals you choose have the stamina and integrity to get the job done!

Naming the Same Guardian for Your Minor Children As for the Property You've Left to Support Them
If you have any doubts about your children's guardians ability to manage the assets you have left your children, you can name a separate guardian to manage your children's property.

Leaving the Wrong Assets to the Wrong People
Leaving a great deal of cash to an eighteen year old might not be in his or her best interest. Nor would it be wise to leave money to someone who has demonstrated poor money choices in the past. Trusts can be established on behalf of those heirs. The trustee distributes income and assets to the beneficiary while safeguarding the remaining assets.

Lack of Assets
This falls under the category of a failure to plan. While not everyone has a substantial estate, we can still provide for our families by purchasing life insurance. The good news is that life insurance rates have gone down. It is actually cheaper now than in the past. Do you have enough life insurance to protect your family? How much is enough? Are you paying too much? Contact your advisor and review your needs.

Many investors that have been hurt by the market meltdown have purchased additional life insurance to make up the difference in the event of their death. Their hope is that with time, their assets will recover and the extra life insurance would not have been needed, but they choose to be on the safe side.


We are here to help in both the good times as well as the rough times. If you have not been able to attend one of our Economic Recovery sessions, or if you have not visited with us recently, contact our office today.

Make sure that you are in a position to have your own Economic Recovery.
Your Wealth Coach,


Robert Moritz
Vice-President
The Circle Financial Planning, Inc Centre of Money Concepts

7828 E 88th St Indianapolis, IN 46256 | Phone: 317-841-0370 Fax: 317-841-1471
www.MoneyConcepts.com/RMoritz
www.360wealthcoach.com
All Securities Through Money Concepts Capital Corp. Member FINRA/SIPC