1! Ha, ha, ha...

I give out a lot of advice and pointers on what to plan for and what to include in your estate plan.  I wanted to change it up a little and help families avoid the mistakes that can lead to disasters in the future.  There is nothing worse than thinking you have your planning in place which takes care of everyone you love and then realizing it is worthless.

#1.  The Total Package

The number one mistake planners make is having a will only and thinking that is all they need.  A will is only one part of a complete estate plan.  Trusts, power of attorneys, living wills and memorial plans round out a complete estate plan. 

#2.  The Do-It-Yourself Kit

I have re-written numerous estate plans for families after they paid money for a do-it-yourself kit bought off of the internet or at a bookstore only to realize it did not take care of their needs.  Every state has different laws and these kits will not always create documents that will stand up to attack in your state.  Furthermore, they are designed only to handle the simplest of estates.  I have yet to see one take care of a situation in a blended family where both parents are divorced, have children together and children from a previous marriage.

#3.  Hiring The Wrong Professional

You would not hire an electrician to handle your plumbing problems.  Be sure you do your research and hire an attorney who focuses in estate planning.  Estate planning laws are fluid.  Bankruptcy laws are as well.  You would NOT want to hire me as your bankruptcy attorney.

#4.  One Trust Fits All

Trusts are very important estate planning tools.  However, trusts are not appropriate for all families and situations.  Avoid the estate planner who suggests a trust every time.  Also, avoid the estate planner who charges a flat rate for trusts.  Some trusts take an hour to create while others can take many, many hours. 

#5.  Trusts for Minor Children

Trusts are very appropriate for families with minor children and minor grandchildren.  Minors cannot legally own anything.  The guardian of the minor ends up “owning” the property and money.  This can lead to problems in and of itself.  Also, most families do not want to ”dump” a large amount of money on an 18 year old.  I know I probably would not have saved much of it when I was 18 if several hundred thousand dollars fell into my lap.  I would have driven a really cool Lamborgini, though.   

#6.  Not Declaring Guardians for Your Children

Most families do not realize that you can declare who you want to take care of your chidren if something were to happen to both parents.  This is one of the most important decisions you will ever make.  Do not exclude it from your planning.

#7.  Designate Your Beneficiaries

All of your accounts (banking, investment, retirement and life insurance) have beneficiary designations that you need to complete.  You state where you want your money to go to.  These accounts will avoid probate if you take care of the beneficiary designations.  You can even designate the money to go to your trust if you are leaving it to a minor child or grandchild.

This list could have been entitled “100 Estate Planning Mistakes You Do Not Want To Make”.  That would have been a tough read, but it hammers the point home that you need to meet with the proper estate planning attorney to ensure that your plan is exactly what you need.

With the sharp decline in home values and an increasing number of foreclosures, Congress created a temporary tax credit for first-time buyers of $8,000 and for other purchasers of new homes of $6,500. In order to qualify for the credit, it was necessary to have a signed contract for purchase by April 30, 2010. The initial deadline for closing contracts signed on or before that date was June 30.

Because many home purchasers could not meet this deadline, the House and Senate have passed the Home Buyer Assistance and Improvement Act of 2010 (H.R. 5623). This bill extends the time for closing from June 30 to September 30.

Chief Economist of the National Association of Realtors Lawrence Yun indicated that this extension of the deadline would be very important. He noted that about “180,000 homebuyers who signed a contract in good faith to receive the tax credit may not be able to finalize by the end of June due to delays in the mortgage process, particularly for short sales.”

These individuals with contracts by April 30 will now be able to close by September 30 and receive their tax credits.