Common estate planning mistakes to avoid
Most people, if not everybody plan on having a good life, a good retirement, a good future for loved one and family, lastly a plan for a good end of life. One way to achieve these good plans is through estate planning.
Estate planning is a process of making many important decisions and plans over your future and that of your loved ones. Specifically, estate plans is about getting plans in place to manage risk at the end of your life and beyond. It concerns what happen to your assets both while you are alive and well or dead, how you want to share your assets to family, children or spouse, who takes over making certain important decisions for you in cases of mental incapability and lastly transfer of ownership of a property.
These plans can only be presented, documented and implemented in wills and testament, living trust, revocable or irrevocable trust, advance medical directives and lastly financial power of attorney (power of attorney).
It is always advisable that you start making your estate plans now regardless of your current financial or medical situation. One mistakes people make is procrastination. Sometimes it takes a significant occurrence in one’s life, like a health scare, or accident to shake us from procrastination on estate planning. This is very wrong.
Other common estate planning mistakes to avoid are:
Not having a real plan in place
Only a real and appropriate estate plan can be implemented. Most people make just any how plans themselves without thought on the implementation and future of those plans. Estate planning is not just about the documents, rather, it concerns the validity of the inclusions in the documents, the process of signing and also implementation of such legal document. Taking up the challenge of creating one of the most important documents of your life has its utter disadvantage. You could throw away assets, valuables and lose them to probate, you could also jeopardize the wellbeing of your family and loved ones.
If you don’t have a valid will and or trust in place, your assets would be shared and distributed according to the intestate laws of the state. Do you really want your estate and end of life care determined by state laws and probate processes in court? If not, be proactive and consult an estate planning attorney to make proper estate plans.
Not planning for disability and long term care
Most times, people consider just preparing a Will of how they want their assets to be shared without considering planning for uncertain future disability or incapacity. No estate plan is considered complete without some plans being in place for disability and long term care. Asides a last Will, you should consider having additional estate documents like advance medical directives and power of attorney.
Improper estate evaluation and taxes
The first of estate planning is usually to make an assessment of your estate, assets and evaluate them after you might have removed all expenses and liabilities. Taxes are placed on estate and other properties. Although with fluctuating economy, taxes placed on estate can be uncertain at different point in time and thus making it difficult for an individual to figure out. One other common mistake is not considering impart of income taxes on you and your beneficiaries.
As a result, you need an estate planning attorney to help you navigate through changes on estate taxes and also bring to your cognizant new taxes as you plan.
Improper Ownership of assets
Taking assets ownership too lightly or improperly may cause problems during the execution of an estate plan. Example of this situation is when a business owner titles business property in their own name and hope to pass it to a trust, or when a retirement account is being funded into a trust when intended to be outside the trust.
Failing to update estate plan over time
This is one of the most common estate planning mistake. Estate planning is not a do it and forget affair. Just having the plans is not enough. You need to constantly review and update your estate plans especially after major life event or when state policy changes.
It is important you revisit your estate plans, much more, consult an estate planning attorney should in case you need to make changes to these plans and estate documents.
