Many people associate estate planning with asset distribution when they die, but it goes much further than that. Estate planning can help manage your assets, lower your tax liabilities while living, and state your medical care preferences if you cannot voice your wishes. The estate planning process can also protect your family from the unknown and help guarantee that your assets will be enjoyed by those you leave behind.
A well-written estate plan is the best way to ensure that your loved ones are taken care of if you are unable to, such as when you die or become unable to care for yourself. Failing to plan for your estate can cause money issues, legal problems, and unnecessary stress for your family and loved ones.
This article will discuss three major estate planning mistakes people make and how to avoid them. From procrastinating, failing to update your plan, and not taking into account tax liabilities and debt issues, we will show you how to avoid these issues altogether.
Mistake 1: Waiting to do Your Estate Plan
If you’re being honest with yourself, estate planning may not be at the top of your list of things to do, but it should be. No one knows when they will die or become unable to take care of themselves. Not having an estate plan can almost guarantee problems in the future. The last thing you want to do is to leave uncertainty behind when you die. Your loved ones may fight over your estate, or worse, they could lose your estate if you don’t take precautions. A common issue many families experience is the wrong people receiving property because there was no estate plan.
The only way to avoid these issues is to plan your estate early and get it out of the way. The easiest way to begin the process is to speak with an attorney with experience helping clients like you. They may instruct you to start listing your assets and who you would like to own them when you die. Estate planning is more manageable when taking small steps under the direction of an experienced estate planning attorney.
Mistake 2: Failing to Update Your Existing Estate Plan
Life changes often, and your estate plan must track important changes. Your goals and circumstances may require you to update your estate plan regularly to make sure it still follows your wishes. There are a number of major life events that may warrant an update to your estate plan, such as having children, getting married or divorced, or even losing a job or entering a new career. Major life events can change who you may want to receive your estate or who you would like to step in for you if you cannot handle your affairs.
It’s recommended that you review your estate plan every few years or in preparation for major life events. It’s a good idea to schedule a yearly checkup with your estate planning lawyer to ensure your estate plan is on track to reach your goals. Laws can change, and your lawyer will be up-to-date on recent legal cases you should know about. This is the only true way to make sure your plan does what it was intended to do.
Mistake 3: Forgetting About Taxes and Estate Debts
Taxes are a huge factor when implementing an estate plan. Failing to account for taxes during the planning process may put your estate in jeopardy. The value of your estate may be reduced, and your loved ones may receive substantially less if you do not take care of any tax issues your estate may have. Speaking with an estate planning attorney with tax experience is important to ensure you have the best plan for your needs. For example, you may be able to use a trust while alive to lower taxes that your estate may one day be responsible for paying.
Estate debts are another area that is often ignored. Addressing your outstanding debts now will allow you to leave more to your loved ones when you die. You may even be able to settle debts while you’re alive. Leaving as much as possible to your loved ones is the name of the game, and handling any tax or debt issues is the best way to leave more behind.
Planning your estate without the help of an attorney may lead to serious issues in the future. It’s easy to make a life-long mistake if you don’t have the required experience in this area of law. Speaking with an attorney is the only way to guarantee your wishes will be completely honored.
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