5 Common Estate Planning Mistakes – How to Avoid Them

Here are 5 common, serious mistakes we see in estate planning – mistakes that can be solved fairly easily with help from your attorney or financial planner.

Misuse of Jointly Held Property – jointly held property may become a nightmare in terms of unexpected tax and nontax problems

First, there is the potential for federal and state gift tax upon the passing of one joint tenant if the property is jointly held with a non-spouse or a non-citizen spouse;

Second, once jointly owned property with a right of survivorship passes to the survivor, any provisions in the person who has passed away's will pertaining to the property are ineffective – this is true even when the property is jointly held with a spouse.

Third, titling assets in joint names can result in such property by-passing provisions of estate planning documents, potentially creating a host of other problems, like double taxation.

Arranging Life Insurance Improperly – Life insurance is a great idea and can absolutely help your loved ones, but it there are things that must be considered, such as who should receive it, and when, and how?

Proceeds from a life insurance policy are often paid to the wrong person at the wrong time, i.e. before that person is legally or emotionally capable of managing it. Proceeds can also be paid in the perhaps not the best way. For example, do you really think an 18 year old should receive a million dollars as a lump sum? Perhaps it would be better if the funds were held in a trust and paid out over a period of time?

Inadequate insurance can also be problematic. How much is enough will vary depending on who is being insured and the situation of that person's family and level of dependency on the person being insured.

Failure to designate a back-up beneficiary is common mistake. When in doubt, always have two back-up beneficiaries listed.

The insured is the owner of the policy, resulting in the proceeds being included in the insured's estate at the time of his death. The easiest way to avoid this is to have a trusted, financially competent adult other than the insured (or a trust) purchase the policy and be named as the beneficiary.

The policy names the estate as the beneficiary. This mistake results in the proceeds being part of the estate and needlessly subject to the claims of the insured's creditors.

Failing to update beneficiary designations to reflect changes to the estate planning documents.

Will Mistakes

Dying without a valid will is once of the biggest mistakes we see, and one of the easiest to avoid. Without a valid will, the result is “intestacy” – which means the state will decide who gets what.

The second most common mistake involving wills is failing to update them. Review your will a minimum of every three years, and after any major life change (marriage, birth of child, divorce, move to a new state, etc.).

Sufficient Liquidity – most people fail to consider how much it will cost to settle their estate, including paying the associated taxes and other expenses. Failing to adequately plan for these costs can result in the forced sale of precious assets. Expenses your executor may have to pay (depending on the size of your estate) are: federal estate and income taxes, state death and income taxes, probate and administration costs, payment of debts, payment of cash bequests, generation-skipping transfer taxes, and funds to continue operation of a family business.

Failure to Maintain Adequate and Easily Accessible Records – More than one executor has been driven crazy trying to locate necessary financial documents. And the search for and/or inability to find the same can end up costing an estate thousands of dollars. Instead of hiding your important financial documents under your mattress or in various random places, take out a safe deposit box. Make sure your executor knows where it is and how to access it.

Bottom Line: If in reading the above, you grew concerned that you might be making any of these common mistakes – fear not! Knowing and recognizing a potential problem is more than half the battle to developing a successful estate plan. The second step is to contact an estate-planning attorney to help you.


Advantages and Tips to Consider If Hiring a Bankruptcy Petition Preparer

Bankruptcy Petition Preparer (BPP) is an individual who is not an attorney or company which is not under an attorney's supervision. A BPP prepares the documents as instructed by you. You may be required to fill out an extensive questionnaire and provide confidential information.

Therefore, you must ensure the Bankruptcy Petition Preparer is trustworthy, complies with the Bankruptcy Code and abides by the legal guidelines to ensure he or she is not performing unauthorized practice of law.

The fee most Bankruptcy Districts allow a Bankruptcy Petition Preparer to charged should be a fee that is at or below the reasonable fee approved by the Courts. In the Middle District of Florida, the fee range should be around $150 for Chapter 7 and $175 for Chapter 13.

Of course, the fee may be less under some circumstances or pro bono. For the most part, a single debtor fee should be no more than $200 unless a person has 25 or more creditors. Ethically, a BPP should charge a reasonable fee that the debtor is able to pay and still pay the Bankruptcy filing fees.


  • Obtain the necessary information to prepare the forms whether by written questionnaires, copies of statements, and/or through you directly
  • Type a debtor's Voluntary Petition, Exhibit D, Summary of Schedules, Schedules A-J, Declaration, Statements and mailing matrix (usually 54 – 60 pages long) under you, the Petitioner's (debtor's), advisement and direction.


  • Provide legal advice
  • Advertise using the word “legal” or any similar terminology
  • Inform or advise you what chapter to file under
  • Inform or advise you what exemptions to claim
  • Inform or advise you regarding reaffirmation
  • Inform or advise you not to list a debt or asset


  1. There are several forms to prepare and you may not have the time to fill out each of them.
  2. Most BPPs have bankruptcy software allowing a quicker preparation time to fill out the forms than if you did it yourself. The software is usually too expensive for a one-time filing.
  3. A debtor may be too stressed out or depressed to complete the forms.
  4. It may be more cost effective compared to hiring an attorney.

Of course a debtor is not limited to using a Bankruptcy Petition Preparer to preparer his or her schedules. He or she may decide a lawyer is needed in order to obtain legal advice for his or her particular situation. Maybe the debtor is unable to pay the fees for filing, let alone a Bankruptcy Petition Preparer to type the forms.

Therefore, he or she may choose to prepare the forms or obtain assistance from pro bono sources. A few sources a debtor may find useful are:

  • US Bankruptcy Court – several videos, resources, and PDF forms
  • Your state's Bar Association – access to attorneys who specialize in bankruptcy and may do pro bono cases
  • American Bankruptcy Institute – pro bono services
  • Your state's Legal Aide office – reduced fees or pro bono services

In any event, a Bankruptcy Petition Preparer should be able to help you with your forms as a Bankruptcy Petition Preparer and make every attempt to provide services at a price you can afford. You may be required to provide information on a 27-page Questionnaire via email prior to your appointment.

You may also need to provide the last 90 days credit and debit statements, last 3 year's tax returns and W-2s, last 60 days of pay stubs, itemization of household goods with estimated values and clothing/attire value. At times, a debtor may need advice that is beyond the scope of a Bankruptcy Petition Preparer. A debtor is not obligated to use a BPPs service in order to file bankruptcy.


This article is being provided as an educational tool and is not intended to provide legal advice. If you need legal advice, contact an attorney.

Is It Hard to Rent After Filing Bankruptcy?

Many Americans have ended up filing bankruptcy due to losing their home to foreclosure. This leaves them homeless and without credit. Many people fear that filing bankruptcy will not allow them to be able to rent a home. This might've been a question in the past, but millions of Americans are facing this dilemma every year. With a large number of foreclosures nationwide and subsequently having to file for bankruptcy, this is a problem that property managers and landlords are aware of. Sure it is better to not have a bankruptcy filing on one's credit report, but sometimes it's necessary to clean the slate and get a fresh start. The only time it might be an issue is if the individual has not received their bankruptcy discharge and are still in the process of filing Chapter 7 bankruptcy. The landlord would be nervous about renting to an individual in the process of filing bankruptcy because of the legalities of it. The last thing a landlord would want to do is become a party to a bankruptcy filing.

There are some factors that a property manager would look at especially if someone had a bankruptcy filing on their record. The first thing they would ask is if the bankruptcy was discharged yet. No landlord would go into a rental agreement or lease knowing that someone was in the middle of the bankruptcy filing. Next, they would look at the causes of the bankruptcy by reviewing the credit. There are a lot of Americans that got upside down because of a bad mortgage that they couldn't afford. The last thing they would look at is if the individual could afford the rent. As a rule of thumb, rent should be less than 30% of one's income. If a person has a good job and been employed for a long period of time, many landlords would overlook the foreclosure and bankruptcy filing.

In today's economy, this is more common than most people realize. While not every landlord will be sensitive to someone's past financial problems, many know that good people got caught up in a bad economy and are trying to put their lives back together. They should also know that this same group of people post filing bankruptcy could possibly be completely debt free. If they no longer have a mortgage or car payment, there's a good chance everything else would be wiped out in the bankruptcy discharge. For the smart landlords, they should know that these individuals are risk worth taking. Because of the risk, don't be surprised if the landlord wants a much larger security deposit usually more than a month. I don't think that this is asking too much due to the situation. In a short amount of time after paying bills and rent on time, credit will start returning to that individual.

Top Grounds to Do Your Estate Planning Now

There is no time like the present working, and that is especially true in countries around the world of property planning . Although it is preferable to live a long and healthy life, it is always prudent to propose in advance to ensure your wishes are carried out as you desire.

Planning now is also important in the event you become mentally unfit . If you become incapacitated, your property programme will make a health care substitute to assist in shaping medical care decisions and for the purpose of carrying out your end of life orders. You can also set off your wishes regarding the appointment of a per-need champion and for the purpose of making an anatomical offering. You may also outline your desires viewing your final disposition, including cremation or burial.

Children and blended pedigrees are another reason why it is crucial to create your owned programme now. Without a strategy, your state's intestacy constitutions decide what happens to your assets. Additionally, when you have no scheme, the court will determine what happens to your minor children and how their assets will be distributed. It is always better to personally adopt those persons who should be responsible for the care of your minor children and the management of their assets. If you have a child with special requirements, it is vital to consider a special necessitates trust. Be sure and work with a qualified estate planning lawyer so they can assist you in making good decisions and refuting the questions you didn't even know you needed to ask.

Exercising authority over the dispensation of your resources is yet another reason to do your planning now. Without a mean in place you could unintentionally disinherit a marriage or child. Planning are also welcome to protect your living spouse in the event of a remarriage or protect your children in the case of divorce or disastrous monetary phenomenon. Proper estate planning can see these concerns and find a solution. Don't find out too late that proper planning could have avoided future problems.

Finally, it's important to consider the plan you already has in and whether the government has wonders your wishes and planning destinations. For some, estate taxes may be a concern and a proper schedule can ensure that more dollars is provided by your beneficiaries than the United States government.

Estate planning is never complete until you re-examine your strategy in harmony with your asset ownership and your beneficiary names. This includes life insurance, retirement plans and annuities. Always work with a qualified manor planning lawyer to make sure your scheme and your assets are properly integral and you understand how one impacts the other.

Remember, establishing your manor programme doesn't stop on the day you perform your programme – it's a lifetime process. Review and inform your planning any time there is a significant change in your family, the law or in your gift. Expect your attorney to continue you advised of changes in their experience that are able to has an effect on the efficacy of your plan.

Estate Planning Tools for People With Disabilities

Everyone should consider how their finances will be taken care once they pass on from this planet. For people with disabilities, care should be taken as to how they will be attended to as well as maximizing government credits and minimizing taxation of their assets. Since they have disabilities, there are different financial planning tools that are available. For cases where an attendant, guardian or caregiver is required, assets should be managed for the present and future periods on behalf of someone with disabilities.

There are various tax credits and government programs which exist to supplement people with disabilities. The tax credits will be listed here, but will not be explored in depth as this article focuses more on the long term financial planning and estate aspects. The tax credits available for people in Ontario, Canada are the disability tax credit, children's fitness amount and Working Income Tax Benefit (expanded for children with disabilities), medical expenses, attendant care, the caregiver amount, travel expenses and home renovation tax credits. For any tax situation, the relevant tax code and regulations for that jurisdiction should be consulted.

There are two main options to consider when considering financial and estate planning. Will someone be taking care of the person with disabilities? In this case, this person would be providing the financial assistance, and they may require a financial plan for their assets as well as those of the relative with disabilities. The second option is whether outside assistance is required. If yes, will the assistance come from government programs, a future sum of money such as a trust or both? If government programs are sought after, care should be taken that they do not interfere with money held in a trust to maximize the benefit of all of the available assets. There are three main tools that will be discussed: the Ontario Disability Support Program (ODSP), the Registered Disability Savings Program (RDSP) and the Henson Trust.

Ontario Disability Support Program (ODSP)

If the family is not able to provide assistance to someone with disabilities, the ODSP is an option for you. This is not the same as Ontario Works, which is geared towards people with low incomes who need assistance with basic needs and finding work. The ODSP does not require people to find work, and tends to pay out more benefits than Ontario Works.

In order to get ODSP benefits, the person who needs them must get approval to receive them. The definition of a disability is a physical or mental impairment that is continuous and recurrent, and is expected to last more than one year. This definition also takes into account restrictions to one or more aspects of daily living. The documents to be completed are the Health Status Report and the Activities of Daily Living Index by a licensed health professional in Ontario. The needs test is the next step. Needs refer to what is required to pay the bills each month. Combined with this calculation is whether the person's monthly income is higher than their budgetary entitlement. If it is, the person would not qualify for ODSP. The ODSP may also be reduced if the person is working or receives money from other sources, like pension payments.

If a person with disabilities receives more than $6000 in one year, ODSP payments are reduced. If such an amount is provided, the amount over $6000 can be spent on disability related goods and services. Exemptions can also be made for running a business, earning income from employment or education expenses. Some of the exemptions are limited to a certain amount before the ODSP is scaled back. If they receive more than $6000 in one year, they would have to spend it immediately in order to continue receiving ODSP benefits.

Assets are also taken into account when approving ODSP benefits. A person with disabilities should not have assets, except for non-exempt items, such as a principle residence, a second property if approved for their health and well-being, a motor vehicle of any value and a second motor vehicle valued under $15,000 for work purposes. Other non-exempt items are the trusts described below, funds used for disability-related items, interest earned on cash-able assets, a compensation award of up to $100,000 for pain and suffering, business assets of up to $20,000 if they are self-employed, a prepaid funeral and approved loans for business expenses and training.

Registered Disability Savings Program (RDSP)

The RDSP is a savings plan that was introduced by the Government of Canada in 2008. It is similar to the Registered Education Savings Plan (RESP) which means that the contribution of money into the RDSP does not create a tax deduction to the contributor. Earnings within the RDSP accumulate on a tax deferred basis so there are no taxes paid on the growth within the plan until funds are withdrawn. Payments coming from the plan can be used for any purpose and must begin no later than when the person with disabilities turns 60 years old. In order to qualify for the RDSP, the person with the disability must qualify continuously for the Disability Tax Credit.

An RDSP contains three components, which are the private contributions, Canadian Disability Savings Grants and Canadian Disability Savings Bonds.

Private Contributions

Once an RDSP has been established, anyone can contribute to the plan provided the plan holder has given written authorization. The beneficiary's parents, family members, non-related people or the person with the disability themselves can make deposits into the plan. The contributions are limited to a lifetime maximum of $200,000 but any amount under this limit can be contributed annually. Spreading of large deposits over a number of years should be considered because of the rules regarding the Canadian Disability Savings Grants and Bonds.

Canadian Disability Savings Grants

This can be a significant component of the RDSP. The Government of Canada will make contributions to an existing RDSP as Canadian Disability Savings Grants when private contributions are made until a lifetime maximum of $70,000 is reached or until the end of the year in which the RDSP beneficiary turns 49 years old. The amount of the grant in a specific year is based on the net income of the parents if the RDSP beneficiary is under 18 years old or on the individual's income if they are over age 18 years old.

Canadian Disability Savings Bonds

In addition to the Canadian Disability Savings Grants, there is also the Canadian Disability Savings Bond. The CDSB are available to lower income families up to a lifetime maximum of $20,000. These funds are available up to $1,000 per year until the $20,000 maximum is reached or until the year in which the RDSP beneficiary reaches age 49 years old.

RDSP Payments

There are two types of payments that can be taken from an RDSP. The first type of payment is called the Disability Assistance Payment. The DAP is a periodic withdrawal from the RDSP at different points of time throughout the life of the plan. These withdrawals can only be made if the private contributions made into the plan are greater than the government contributions to the plan. If you only make the minimum contribution to the plan to achieve the maximum government grants and bonds, this payment from the RDSP will not be available. If you do make this payment, the grant and bond contributions for the prior ten years must be repaid to the government. This is called the holdback amount and could be up to $45,000 in repayments at the most. There is also a limitation that the holdback amount must remain in the plan as a guarantee of payment.

The second type of payment from the plan is called the Lifetime Disability Assistance Payment. This payment must begin no later than when the beneficiary is 60 years old. Once these payments begin, they must be continued. The size of the payment is determined by a formula based on the life expectancy of the RDSP beneficiary. The standard life expectancy has been set at 80 years old plus 3 additional years. If a doctor verifies that a person's life expectancy is less than 80 years old then the formula would be adjusted.

Taxation of RDSP Payments

Each payment that is made from an RDSP is considered to be made up of three components. The first component is private contributions which are not taxed. The second component is the Canadian Disability Savings Grants and Canadian Disability Savings Bonds. Both of these components are taxable in the hands of the beneficiary of the RDSP. The final component is the income that has been earned on the private contributions, CDSG and CDSB contributions, and these would be taxed as well.

Henson Trust

A Henson Trust is a pool of money set up apart from the person receiving it. The money is controlled exclusively by the trustee and not the beneficiary, so the beneficiary cannot use the assets of the trust without the trustee allowing it. It is for this reason that the trust is not considered assets of the beneficiary, and this allows money to flow to the beneficiary from other sources, like ODSP. The beneficiary can spend up to $6000 from the Henson Trust without affecting benefits. This trust can have assets of any amount. It can be set up in the settlor's will, or while the settlor is still alive. The settlor is the person who sets up the trust. Henson Trusts can be used to pay proceeds to someone with disabilities as well as other beneficiaries as part of an estate.

When Should You Use a Trust?

The key questions to ask are: Can the support provided from a trust be better than that from ODSP? Do the relatives have enough assets to support the trust, and are they willing to provide them? Are other beneficiaries self-sufficient or will they have to share in the assets of the trust? If they do, to what extent and how would that impact the person with disabilities? Is it possible that the person with disabilities would not qualify for ODSP because they can find work, run a business or earn income in some other way? The key theme is what methods would offer the best quality of life for the person who needs it? If ODSP is the main income source, then a trust would not be necessary. If there are assets available that would conflict with ODSP benefits, a Henson Trust is a good way to compliment these benefits. If there is an RDSP, this can work together with the Henson Trust to provide income in later years – 60 years old or more.

The Trustee Is the Key

Since the Trustee has absolute say in what happens with the Trust, it is wise to choose a group of people to oversee the trust, with a possibility of checks and balances between them to ensure the trust is doing what it is intended to do. This group would bring different skills to the table to minimize bias and conflict of interest. The trustees should be trustworthy, have good business sense, be organized and must have the needs of the beneficiary in mind first and foremost. The trustees are in fact being trusted with the livelihood of another person who cannot do it themselves.

There are many tools available to plan for someone with disabilities. Each of these tools should be measured against the situation at hand to see which one will do the best job of providing benefits. The timing of the benefits should also be examined to see when each instrument would be most beneficial.