7 Overlooked Risks in Trust and Estate Plans That Could Cost You Millions
By Scott Nelson
Trust and estate plans are essential for protecting your wealth and ensuring it passes smoothly to your heirs. However, even the most comprehensive plans can have hidden risks that, if overlooked, could cost you millions. At Legacy Financial Group, a leading financial planning firm based in Iowa, we specialize in helping Iowans secure their legacies by identifying and mitigating these risks. Here are seven potential pitfalls to watch out for:
1. Outdated Beneficiary Designations
Even if your estate plan is well-structured, failing to update beneficiary designations on retirement accounts, insurance policies, and other assets can lead to unintended distributions. In Iowa, it’s critical to regularly review and update these designations to ensure that your assets go to the right individuals. Our team at Legacy Financial Group helps clients in Iowa stay proactive, ensuring that beneficiary designations align with their overall estate plans.
2. Unanticipated Life Changes
Life events such as divorce, remarriage, or the birth of a child can significantly impact your estate plan. If you don’t update your plan to reflect these changes, your assets might be distributed in ways you didn’t intend. In Iowa, where family dynamics can vary widely, keeping your estate plan current is crucial to aligning it with your present circumstances. Legacy Financial Group offers comprehensive estate planning services to help Iowa families adapt to life’s changes.
3. Failing to Plan for Incapacity
While many Iowans focus on how their assets will be distributed after death, planning for incapacity is just as important. Without a power of attorney or healthcare directive, your family may face difficulties managing your affairs if you become incapacitated. Legacy Financial Group ensures that Iowa residents have the right documents in place, reducing stress and financial strain for loved ones during critical times.
4. Ignoring Iowa’s State Tax Laws
While federal estate taxes might not apply to all Iowans, state-level inheritance taxes could still impact your heirs. Neglecting to consider Iowa’s tax laws in your estate plan can lead to unexpected tax bills for your beneficiaries. At Legacy Financial Group, we help clients navigate both federal and Iowa-specific tax laws to protect more of their hard-earned wealth.
5. Overlooked Trust Maintenance
Trusts are a popular estate planning tool in Iowa, but they require ongoing maintenance to remain effective. Failing to fund the trust properly or neglecting regular reviews can compromise your entire plan. Our Iowa-based team at Legacy Financial Group conducts routine check-ins with clients to ensure their trusts are up-to-date and assets are correctly aligned with their estate goals.
6. Miscommunication Among Family Members
A lack of communication about your estate plan can lead to disputes among heirs. Open conversations with family members about your intentions can prevent conflicts and potential legal challenges down the road. At Legacy Financial Group, we encourage transparent communication among Iowa families, helping ensure that your estate plan is clearly understood by all parties involved.
7. Changes in Tax Laws
Tax laws change frequently, and what worked when you initially set up your plan may no longer be effective today. Regularly reviewing your estate plan with an Iowa estate planning expert ensures it remains compliant with current laws and continues to provide the protection you intended. Legacy Financial Group keeps up with the latest changes in federal and state tax laws to ensure your estate plan remains robust.
Safeguard Your Legacy with Legacy Financial Group
At Legacy Financial Group, we help high-net-worth individuals and families across Iowa address the hidden risks that could undermine even the most comprehensive estate plans. Our expert team will review your current plan and update it as needed, working to help ensure your estate plan grows and preserves your wealth for your loved ones.
Contact us today for a personalized consultation and make sure your legacy remains safe in Iowa and beyond.
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Disclosures: The material presented by Scott Nelson is for informational purposes only. It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product. Actual economic or market events may turn out differently than as presented. Scott Nelson is a Financial Advisor with Legacy Financial Group. Advisory services are provided by Legacy Financial Group, a registered investment advisor with the Securities and Exchange Commission. Materials posted to this site are from external sources and are provided for your convenience in locating related information and services. Legacy expressly disclaims any responsibility for and does not maintain, control, recommend, or endorse third-party sites, organizations, products, or services, and make no representation as to the completeness, suitability, or quality thereof.
