Top estate planning mistakes and how to avoid them
While making an estate plan, there are mistakes people commonly end up making because of ignorance or misinformation, and the secret to avoiding these mistakes is knowing them. The following are top 10 common estate planning mistakes people make and how to avoid them.
Top mistakes to avoid in estate planning
1. Thinking that estate planning is only for the rich and famous
Many people hold this belief and so leave estate planning because they have only one or a very few assets to their name. Even a car, bank account, or house will have to pass down to a beneficiary, and so there is need to state who you want to be the beneficiary. If not, it may end up in the hands of someone undeserving of it.
2. Only planning for after death situations
Many people think estate planning is only about how your property gets disbursed after your death and so fail to plan for disability, mental incapacity, tax avoidance and end of life situations. One may be rendered incapable of running their own business due to illness, accident or sudden disability. A person has to be appointed to run the business, and this appointment is made by creating a durable power of attorney in the owner’s estate plan.
3. Forgetting to update beneficiary designations
Beneficiaries in your wills and trusts have to be consistent with those on your insurance and retirement accounts. A person might create a will, name a beneficiary of his insurance policy, and forget that there is a different beneficiary already on the insurance policy. If that in the will is what you want, then you have to make it the same as what’s in your insurance policy as well. Insurance policies and retirement accounts go to the designated beneficiary and not what the will says.
4. Failing to update your plan
Many things might require you to update your plan. Acquiring new assets, having new kids or loved ones, or moving to a new state. In as much as estate laws change from state to state, there is need to update your estate plan when you move to a new state. Separation, divorce and remarriage may also require you updating the beneficiaries in your will.
5. Naming a minor as a beneficiary
Minors (children under the age of 18) are never allowed by law to inherit property. If you have a minor, ensure you appoint a guardian in your will.
6. Not planning for probate avoidance
Probate can get very complicated and burdensome for the surviving family especially when the deceased owned property in multiple states. In addition to a trust, an experienced estate planning lawyer can proffer means by which probate can be avoided.
7. Forgetting to do tax planning
In addition to estate tax, income tax imposed on inherited property may become a burden for your heirs. Effective estate planning involves finding ways to pass property to heirs in the easiest and most tax-efficient way possible.
8. Not having an estate plan at all
This is one major mistake people make in their lives. Not having an estate plan means you’re giving up your right to decide what happens to your estate when you become old or die. Without an estate plan, you have no say as to how your property gets when you pass away, who benefits from it, who acts as a guardian for your minors, and how your business is run when you fall critically ill. When such disasters come knocking, the state would have to decide for you and their decision hardly ever would reflect your personal intentions. A lot of financial burden is also heaped on your loved ones when you fail to make proactive plans.
9. Not contacting a legal professional
Many people make the mistake of going into estate planning without seeking the professional advice and assistance of a legal practitioner. The lawyer specialized in estate matters is an estate planning lawyer, and bringing your problems to him is the sure fire way in ensuring that all estate planning mistakes are avoided.
Estate Planning Attorney near me 10014
The New York estate planning lawyer is empathic and listens keenly to the problems and goals of his clients, and then offer legal assistance in drafting a proper estate plan that addresses each issue and helps achieve the estate goals. Having an estate plan is not enough, having a proper one that better reflects your intentions and offers you the best benefits is what matters most. Estate planning is a legal and financial matter, one better left in the hands of the professionals to ensure that these mistakes do not affect you. Do you live anywhere within the area code 10014 or any other New York borough? Contact the New York estate planning attorney 10014 today.