Legal Tea Ep. No. 145. Cautionary Tales - Five Mistakes Other Professionals Make Relating to Estate Planning
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May 21, 2024 This episode dives into cautionary tales, revealing five critical mistakes that professionals often make in estate planning. Discover why a basic will might not cover essential issues like minor heirs and special needs. Learn the pitfalls of promising specific costs and recommending outside financial products. Understand the modern differences in irrevocable trusts and the importance of balancing tax advice with clients' true goals. Finally, explore how solely relying on beneficiary designations can lead to conflicts and debts.
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Don't Default To 'Just A Will'
- Do not assume a client only needs a basic will; probe for issues like minor children, special needs, or addictions.
- Ask follow-up questions or consult the attorney directly before concluding a simple will suffices.
Set Expectations Within Your Lane
- Avoid setting firm cost or product expectations outside your expertise; explain options and value instead.
- Refer legal fee specifics to the attorney and financial-product specifics to the appropriate professional.
Modern Irrevocable Trusts Differ Greatly
- Irrevocable trusts today can differ dramatically from those created decades ago and may not change a client's tax bracket.
- Modern grantor irrevocable trusts can use the grantor's SSN and avoid separate trust tax rates.