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Still, it's fairly common for someone who suffers a heart attack to truly want to get into the best shape of his life. He throws out processed foods and doubles down on kale. The gym is suddenly incredibly important. He starts monitoring everything about his body in a way he never would have before, although — while that's needed to some extent — it's easy to overcompensate. That's common in estate planning, as well.
When you're backed into a corner, overcompensating is all too common. If you are talking with your attorney while experiencing stress, it's easy for him or her to want to allay your fears completely. In so doing, it's easy to lose track of what those decisions mean for your loved ones when you are gone.
This kind of over-planning can open up your estate to cost burdens that are unnecessary and avoidable, and which are especially detrimental if your plan kicks in while you require long-term care.
My team frequently reviews estate plans, and we often discover overly complicated structures. Recently, while going through a discovery process, I encountered a situation where the client's home had been transferred into an irrevocable trust. When this person sold her home and moved into assisted living, she missed out on $250,000 in tax-free dollars under the primary residence home sale exclusion.
It was quite a misstep. We consulted with an accountant, and our client's attorney to fix the situation going forward. It took some additional time and money to address it, but I was so glad that we were able to help.