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How to avoid common estate planning errors

People in Tennessee who are creating an estate plan can take steps to avoid three common mistakes. The first is not leaving a list of all assets and how they can be accessed. Even people who create a list can make the mistake of leaving important items off. From bank to brokerage accounts and life insurance policies to digital assets, such as Instagram accounts, people may have many assets that are protected by passwords as well as other personal information ranging from names of pets to first teachers and more. On top of that, there may be additional assets that have sentimental value. Everything should go on the list.

Failing to correctly designate beneficiaries is another common error. Many people are unaware that some assets, such as retirement accounts, must be passed down using beneficiary designations. Saying what should happen to these assets in a will or a trust is not sufficient, and if other documents contradict the beneficiary designation, the beneficiary designation overrides them. This could lead to a situation in which an unintended person gets the asset, or it ends up in probate or in a legal battle.

Tips for parents to give children stability after divorce

Some Tennessee parents who are going through a divorce may be considering the pros and cons of the birdnesting arrangement for child custody. Also known as nesting, this approach involves parents taking turns living in the family home while the children continue to live there full time. Most people cannot afford three homes, so they usually take turns living in one apartment nearby.

This technique can allow children to ease into the divorce with the least amount of upheaval. However, experts caution that birdnesting needs to be a temporary arrangement of no more than three to six months. Longer periods of time may encourage children to think their parents may reconcile. The arrangement may also put a strain on the divorcing spouses even if the split is amicable.

How to estate plan for less liquid assets

Tennessee residents who are going through the estate planning process may face a variety of challenges. One of them might be determining how to pass assets such as jewelry or artwork. These types of assets tend to be less liquid, and they also tend to be harder to value or keep track of. However, it is critical to come to a proper valuation whether an asset is to be transferred or sold.

Ideally, artwork or similar assets will be appraised by an independent professional who is certified by the The Appraisers Association of America or a similar group. Relying on the advice of a former owner or an online forum may make it harder to get accurate advice. If an item is given an incorrect value, it may result in unfavorable decisions related to how it is insured or dealt with as part of an overall estate plan.

Your divorce does not need to be a war

Ending your marriage may be causing you and your spouse a lot of pain. Both of you are likely feeling some mixture of anger and sadness. You may also be dreading the thought of endless courtroom arguments. However, the belief that divorce needs to be nasty is a misconception.

Your divorce can actually be quite peaceful. If both you and your spouse make an effort to have an amicable breakup, you can minimize the pain you experience. Here is how you can have a smoother divorce.

Dispelling common prenuptial agreement myths

For some couples in Tennessee, simply mentioning a prenuptial agreement brings to mind concerns about mistrust and the possibility that a marriage may already be doomed before the "I dos" are exchanged. Oftentimes, such beliefs stem from popular misconceptions people have about prenups. One of the most common ones is that such agreements are only necessary if one soon-to-be-spouse is exceedingly wealthy or a higher earner than the other person.

In reality, prenups are designed to protect all types of marital assets, and they can predetermine everything from debt responsibility to who would get the family pet in the event of a divorce. Even so, stipulations spelled out in a prenup must be reasonable, which means agreements that include requirements about appearance or a refusal to pay child support in the future may be invalidated. Timing is also important. Prenups hastily signed before a wedding may not stand up in court either.

Divorcing after the changes from the Tax Cuts and Jobs Act

Couples in Tennessee who are considering divorce in which alimony will be a factor may want to look into making sure the divorce is finalized in 2018. Starting in 2019, spousal support payments will no longer be tax-deductible for the payer. Although the recipient will also not be required to pay taxes, experts say the change will probably mean less money for the recipient.

This is one of the changes brought in by the Tax Cuts and Jobs Act that was passed at the end of 2017. While most of the changes will sunset in 2025, the change in alimony will not although it is unclear whether Congress will make changes. Couples may want to include language in their divorce agreement that addresses what will happen if there is a change in the tax status of alimony payments.

Small businesses and estate plans

Small business owners in Tennessee should make sure that they have estate plans in place that specify how their companies are to be handled when they die. In situations where small business owners die without a will or an estate plan, what happens to the business that is left behind will be determined by the laws in which the decedent lived.

Preplanning is a necessary part of creating an estate plan, and entrepreneurs should be prepared to create more than just a will. Their estate plans should specify what actions should be taken with their families and assets in the event of incapacitation or death.

Planning for a new school year following a divorce

A new school year in Tennessee comes with a wide range of emotions for any child. There's the excitement of being around familiar friends and getting back to favorite sports and the anxiety over tackling more challenging classes. The apprehension of returning to school can be even greater for children following a divorce, especially if they'll now be splitting their time between two households. One way parents may be able to make the transition easier is to have a solid game plan in place before the school year begins.

This might include having a group discussion in which a child talks about their main goals for the upcoming school year and parents share their input. If a group discussion isn't possible because of lingering tensions following a divorce, children may be able to discuss their academic and athletic goals separately with each parent. With school-related expenses for things like dances, trips, or sports equipment, some parents prefer to do a 50/50 split, while others opt to divvy up these financial responsibilities by income level.

Collaborative divorce: a more amicable solution

If you and your spouse are contemplating a Tennessee divorce, it is highly likely that neither of you looks forward to a long, expensive court battle wherein the adversarial lines are firmly drawn between you. But divorce does not have to be this way. If both of you would just as soon not verbally rip each other to shreds in open court, you may wish to consider obtaining a collaborative divorce.

Unlike a traditional litigated divorce, a collaborative divorce has no adversarial relationships. While you and your spouse each retains your own attorney, the similarities stop here. Your respective attorneys never see each other as adversaries, nor do they see you and your spouse as adversaries. Instead, the jobs of you and your spouse are to negotiate and settle your differences in a civilized manner. The jobs of your respective attorneys are to guide you through the divorce process and protect your respective legal rights should such protection become necessary.

Importance of estate plans

One of the most significant mistakes Tennessee residents can make regarding an estate plan is not having one. Individuals who die without an estate plan create a situation in which their loved ones will not receive their inheritances as they intended. Family conflicts can arise, disbursements can be delayed for a long time, and the estate may be subject to additional taxes that otherwise could have been avoided.

Many people in the United States have not completed a will or living trust. According to a 2017 survey, just 40 percent of adult Americans have those legal devices in place. The survey respondents reported that the main reason for not taking estate-planning steps is that they just haven't "gotten around to it."

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