14 Oct Estate Planning Mistakes
Creating an estate plan may seem like a daunting task, but once you’re aware of the common traps, it’s smooth sailing. Read this guide and you can avoid those mistakes. Estate planning is more than just paperwork – it’s here is to leave behind a legacy, not a riddle for your loved ones to solve.
Whether you’re just starting or refining an old plan, now’s the time to dive into the details that could trip you up. This knowledge will help you build a seamless estate plan that protects your vision and secures your legacy. Here are the most common estate planning mistakes—and how you can avoid them.
Putting It Off Too Long – The biggest blunder? Not having a plan at all! It’s easy to procrastinate but skipping your estate plan could leave your loved ones vulnerable. If you haven’t started your estate plan or it’s been more than five years, or you’ve had a big life event (marriage or baby), make time now to create or review your plan.
Beneficiaries – List beneficiaries as primary and contingent on every account/policy. If a primary beneficiary passes away before you, your assets have a place to go.
Skipping Power of Attorney – Don’t forget to designate a Power of Attorney or Healthcare Proxy/Financial Proxy to make decisions if you’re unable to do so. This will appoint trusted people to manage your medical and financial decisions in case of incapacity.
Overlooking Funeral Plans – Planning your final arrangements ahead of time can relieve your loved ones from making tough decisions while grieving. It will also ensure your wishes are followed. Having the conversation with your loved ones ahead of time will alleviate the stress when the time comes.
Ignoring Your Digital Footprint In today’s tech world, your digital assets are just as important as physical ones. Don’t forget about them. Create a file with login ad passwords and talk with your loved ones about where to find this information. Appoint a person to handle your online presence and accounts.
Be Clear with distribution of your estate – How you word your plan can affect your children’s future more than you think. Provide clear guidance on inheritance distribution, especially for minors. Avoid overcomplicating their inheritance with rigid conditions or being too specific. If giving back is important to you, be clear how you will leave assets or dedicate part of your assets to causes/charities you care about.
Underestimating Taxes – Taxes can eat away at your estate, leaving less for your heirs if you don’t plan for it. Be aware of federal and state tax thresholds, and plan accordingly to minimize your estate’s tax liability.
Misplacing Your Plan – What good is an estate plan if no one can find it? Store your documents in a safe, accessible place, and make sure a trusted family member knows where to find them.
Creating an estate plan is a gift to your loved ones—a way to show your care long after you’re gone. But even with the best intentions, mistakes can happen. Talk to us and we can help you through the process.
Content was taken from the following sites; https://trustandwill.com/learn/estate-planning-mistakes, https://www.irs.gov/businesses/small-businesses-self-employed/estate-tax