Top 5 Common Estate Planning Mistakes to Avoid

If you’re younger than 50, you might not have given much thought to estate planning yet. However, estate planning is an important process that helps you protect and provide for your family. To help you get started, we’ve put together a list of the top five common mistakes to avoid in estate planning.

Mistake #1: Avoiding it Altogether

Thinking about being unable to care for your family is not a pleasant topic, which is why many people postpone or even completely avoid estate planning until it’s too late. Others think the process is too complicated, or that only people with a lot of assets need a will or trust. No matter the size of your estate, estate planning is beneficial. 

A detailed estate plan gives you control over the distribution of your assets (including sentimental items and heirlooms) to your chosen beneficiaries but also helps you manage them during your life. If you have minor children, you can help protect their future by selecting an appropriate guardian. Estate planning can even protect your assets in cases of divorce or bankruptcy. 

Without a will or trust, all these issues and more will be left up to the courts.

Mistake #2: Not Updating Your Estate Plan

If you’ve already made an estate plan, you might feel like you’re ahead of the game. Don’t forget to update it after certain life changes (e.g., marriage, divorce, birth of children, starting a business, etc.) though. Neglecting revisions to your plan can result in outdated provisions or even failure to comply with current laws, which could render the plan worthless. Experts suggest revisiting your estate plan every three years, as well as after major life events.

Mistake #3: Failing to Consider Tax Implications

Estate, gift, and income taxes can all impact the value of your estate (both during your lifetime and after your death). Estate planning experts can help you structure your plan to minimize these taxes as much as possible. In some cases, setting up a trust can be a good option.

Mistake #4: Choosing the Wrong Executor or Trustee

When thinking about who you want to carry out your wishes based on your will (executor) or manage your trust (trustee), you don’t have to automatically choose a family member. Consider whether the person is trustworthy, has the ability to handle the responsibilities, is in good health, and is willing to serve in this capacity. 

Mistake #5: Not Planning for Incapacity

Estate planning is not just about end-of-life planning. It’s also important to have a plan in place in the event you become incapacitated and cannot make decisions for yourself. Two valuable tools include setting up a power of attorney and a living will that outline your wishes when it comes to medical and financial decisions made on your behalf if you’re unable to manage your own affairs.

Get Estate Planning Help from Experts

The estate planning group at Lonich Patton Ehrlich Policastri offers a full range of estate planning services and has years of experience in helping clients avoid common mistakes like the ones above. Schedule a free consultation to get started on securing your future today.

 

Disclaimer: this article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.