Common Estate Planning Mistakes
What is an estate? It’s everything you own. Your home, personal possessions including your furniture and car, checking and savings accounts, life insurance policy, and more comprise your estate. What happens to what you own after you die? This is where estate planning comes in. Estate planning lets you decide where your possessions will go and who will control them after your death.
Planning an estate is an important responsibility for individuals whether they are rich or middle class. It’s one you’ll want to do correctly to ensure that your possessions are well taken care of after you die. What are five common estate planning mistakes people make according to estate attorneys?
Choosing the Wrong Person to Take Over Your Estate
When selecting a person to handle your estate, it is imperative that you give the decision a lot of thought before you make a choice. For example, you may think your children would be the best to handle your estate when your gone, but are they the right choice? Is it better to choose someone who would be neutral to handle your estate? Make sure you take some time to consider the best option.
Failing to Update Your Estate Planning Documents
Preparing your estate planning documents, such as a will, is one of the best things you can do. But circumstances over your lifetime can change, and it’s up to you to make sure that your documents are to date. For example, if you’ve named your brother or sister to be the guardian of your children if you die, what happens if they have committed a crime and is incarcerated, for example? You’ll want to update your will to name a different person to be the guardian of your children in case of your death. Checking your documents from time to time keeps them relevant for you life situation.
Failing to Reduce Your Tax With Gifts
Part of the way to understand your estate planning is to learn how to reduce your property taxes. The IRS allows up to $14,000 a year per spouse to be excluded from estate tax. Failure to take advantage of this exclusion will mean less money that you can save in estate tax savings.
Failing to Have Any Estate Planning Documents
One of the biggest mistakes that people make is not having any estate planning documents. Death is a necessary and an inevitable fact of life. Ignoring the fact that you will die someday is not wise when it comes to estate planning. Recognize that death is a normal part of life and preparing estate planning documents to take care of your estate planning documents is critical after you pass away.
Not Meeting with An Estate Planning Attorney
An estate planning attorney who is very knowledgeable on the documents, laws, and taxes, is your best bet to take full advantage of estate planning, particularly if you have a lot of assets. Only a professional would know all the rules and regulations of estate planning, and he or she would be best to help you save money on estate planning taxes.
Death is an inevitable factor of life, and during your lifetime you will have acquired various personal possessions and policies that will comprise your estate. Choosing an estate professional to help you with your paperwork and to help you decide the right person to take over your estate when you die is one of the best things you can do.