There is some bad information out there regarding estate planning details, and some of it stems from the agenda of certain profiteers. In other cases inaccurate or incomplete information is not intentionally disseminated and is the product of a lack of understanding, but it can be damaging all the same.
One of these misconceptions involves the assertion that the federal estate tax is only applicable to people of extraordinary wealth. Beginning in 2013 the estate tax exclusion is going down to just $1 million. At that time the maximum rate of the tax is rising to 55%. It should be noted that these parameters could be changed in the meantime if relevant legislation was to be passed, but we can only work with the law as it stands today.
A lot of people who do not consider themselves to be truly rich have assets that exceed $1 million. So if you were to buy into the notion that the estate tax is not relevant unless you are someone like Bill Gates or Warren Buffett and make no plans to mitigate your exposure your family could be in for a rude awakening after you pass away.
Another myth that some people embrace is the idea that probate is something that should be avoided at all costs. In the state of New Jersey probate has become quite streamlined, and there is no reason to automatically assume that it is a bad thing.
The last misconception that we would like to cover is the notion that you can plan your own estate. Yes, you can download a generic last will template from the website of an Internet marketer and fill in the blanks. But are you sure that it will be legally binding in the jurisdiction within which you reside? Does the verbiage prevent the possibility of effective will challenges? Is it wise to try to arrange for the transfer of all of your worldly possessions without professional advice?
In the end, the only way that you’re going to get unimpeachable information is through a licensed professional. When you get serious about planning for the future, the intelligent course of action is to go straight to the source and arrange for a consultation with an experienced estate planning attorney.
Alan Augulis, Estate Planning Attorney
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