Everyone’s estate plan will vary, as each one is as unique as a person’s assets, but to avoid causing your loved ones unnecessary added grief and frustration, there are a few common pitfalls that you want to avoid during your estate planning process. Remember, a good estate plan can protect your loved ones, but more importantly, it will protect your estate assets in case you become incapacitated. Not having an estate plan in place is the first common mistake you want to avoid; a few others are listed below.
- DIY (do-it-yourself) may seem like a very tempting option and possibly cost effective. But writing up your own Will or even downloading a form from the Internet is a huge mistake, due to the fact that the process of creating and filing a Will is a complicated procedure. If one minor thing is not done correctly, a homemade Will may not be recognized, and a judge may deem it necessary to make a decision regarding distribution of assets, that may not be in line with the decedent’s wishes.
- Another huge estate planning error is never updating your Will. Laws and your personal circumstances change frequently, and it is for these reasons, that a Will needs to be reviewed and updated. In addition, your Will needs to be reviewed and adjusted, to reflect your current financial situation, marital status, and also your current wishes.
- Forgetting about your “furry friends” is a common oversight during the estate planning process. It is important to set up a trust fund to care for your pets; otherwise, sadly, forgotten pets may follow their owners to the grave.
- Keeping all important Estate documents in a well-hidden place; that no one knows about, means that these documents cannot be found, and therefore cannot be used. These papers should be kept in a safe – yet accessible area, such as a safe deposit box at a financial institution. Family members should know where the key is, which bank the box is located, bank account numbers, and other pertinent data that they will need after your passing.
- Not giving, while you are alive, is a common mistake that many people make. Financial gifts (about 13 thousand a year) can save the Estate double that amount in tax payments.
- Not taking advantage of tools and strategies currently available. This is another reason not to do Estate Planning on your own, as most individuals do not have access to all estate planning tools (such as an exemption trust, which is also known as a Credit Shelter Trust), and all the benefits associated with these types of tools.
- Procrastination is a pitfall that happens to a lot of people. They may understand the importance and the benefits associated with estate planning, but often times, they do not see the urgency in the matter. In some cases, time runs out, so please seek legal counsel today, regarding your estate matters.