Avoiding Estate Planning Mistakes: Common Pitfalls to Watch Out For
Estate planning is an essential process that involves making arrangements for the distribution of assets and wealth after death. Unfortunately, however, estate planning can often be complex, leading to mistakes which could create issues for loved ones in the future. Here we will outline some potential pitfalls you need to watch out for so as to avoid making estate planning errors.
Failing to create an estate plan
One of the most frequent errors people make is failing to create an estate plan. This can lead to confusion and disputes within family units, as assets may not be distributed as planned. To prevent this mistake from recurring, it’s wise to consult an estate planning attorney for assistance in crafting an in-depth estate plan.
Not updating your estate plan
Mistakenly failing to regularly update your estate plan can have serious repercussions. Changes such as marriage, divorce, birth or death in the family can have profound ramifications for it; reviewing it every few years or when significant events take place is recommended for optimal results.
Not considering the tax implications
Estate taxes have the ability to have a profound effect on both you and your beneficiaries, with failing to consider tax ramifications of an estate plan having serious ramifications for both. Therefore, it’s crucial that you seek assistance from an experienced estate planning attorney in creating a plan which minimizes tax liabilities as part of creating a lasting legacy for loved ones.
Not planning for incapacity
However, planning for incapacity should also be prioritized when considering future outcomes. This includes creating documents such as a power of attorney, healthcare proxy and living will. Failing to plan in this way could force family members into making difficult decisions on your behalf without guidance or input from you.
Not communicating your wishes
Finalizing an estate plan without discussing it with loved ones can cause confusion and disagreement after you pass. Therefore, it’s vital to discuss it so everyone understands your wishes and works towards fulfilling them together.
