02 Jun
Mistakes happen. Most mistakes may cost a Texas resident some time and perhaps a relatively small amount of money. However, when estate planning mistakes occur, the cost can be extensive.
Perhaps one of the most expensive mistakes some people make is attempting to create their own estate plan without complete knowledge of the laws and financial implications surrounding their decisions. One mistake that is common among those over the age of 70 is to begin to give assets to their heirs. For example, some will decide that it is good idea to go ahead and have the home’s beneficiary added to the home’s deed.
This may appear to be a great idea on the surface. However, in many cases, the Texas home was purchased years ago and is now worth considerably more than its original purchase price. It is possible that by adding the beneficiary to the deed, capital gains taxes may come in to play. Depending upon the difference in the value of the home now as compared to its purchase price, this can be a sizable tax bill.
Another problem with this course of action is that it can interfere with the individual’s ability to qualify for Medicaid benefits. If the individual needs to access certain benefits such as nursing home care, there is usually a look back period to make sure that there has not been an attempt to hide assets that could help defray some of the cost. It is possible that the individual’s eligibility will be delayed until this period of time has expired.
Estate planning mistakes can be costly. Of course, the most prudent course of action is to consult experienced legal counsel before any action takes place. However, even if some mistakes have already been made, many can be adjusted by working with an estate planning attorney.